Aug 282020
 
 August 28, 2020  Posted by at 9:51 am Finance Tagged with: , , , , , , , , , , , , , ,  13 Responses »


Frans Hals Two Laughing Boys with a Mug of Beer 1626 (stolen 3rd time yesterday)

 

Pelosi Says There Shouldn’t Be Any Debates Between Biden And Trump (Hill)
Trump Denounces Riots, Cancel Culture, Failed Political Class In Speech (RT)
61 Million Americans Have Stopped Commuting (ZH)
WHO Skips Wuhan During China Trip; “Sat In Beijing For Three Weeks” (ZH)
US Imposes Sanctions On Russian Institute That Developed COVID19 Vaccine (GZ)
Germany Imposes Fine For All Non-Mask Wearers In New National Crackdown (ZH)
The Fed Policies Have Become Part Of The Problem (ZH)
Subprime Mortgages Fall Massively Delinquent (WS)
Shinzo Abe, Japan’s Longest-Serving PM, Resigns Due To Health Issues (RT)
Laura Ravages Louisiana Coast With Wind Speeds Not Seen In A Century (Hill)

 

 

260,000 reads for yesterday’s Are The Tables Starting To Turn? on Zero Hedge alone so far.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nancy’s 80, and she’s losing again, in her final battle. When saying things like this, she will be seen by many people as a sore loser. Not by those who follow her anyway and anywhere, but by the undecideds. The polls say her party is losing those people. And she’s right, Biden will be hammered, but running away is not a viable option.

Most of all, if you ask me, Biden and Pelosi just look like very old and bitter people. Look at Biden!

Pelosi Says There Shouldn’t Be Any Debates Between Biden And Trump (Hill)

Speaker Nancy Pelosi (D-Calif.) said Thursday she doesn’t think there should be any presidential debates ahead of the November election, arguing Democratic presidential nominee Joe Biden shouldn’t “legitimize” a discussion with President Trump.“I don’t think that there should be any debates,” Pelosi told reporters. “I do not think that the president of the United States has comported himself in a way that anybody has any association with truth, evidence, data and facts.”“I wouldn’t legitimize a conversation with him nor a debate in terms of the presidency of the United States,” she added.


“I think that he’ll probably act in a way that is beneath the dignity of the presidency,” she said, citing what she called his “disgraceful” actions during the 2016 debates with former Secretary of State Hillary Clinton. “He does that every day,” she added. “But I think he will also belittle what the debates are supposed to be about.” Instead, Pelosi proposed that the candidates take separate stages and answer questions about their policies in a “conversation with the American people” instead of “an exercise in skulduggery.” But she acknowledged that the Biden campaign “thinks in a different way about this.”

Read more …

Take from RT. I’m pretty sure CNN’s take is slightly different.

Trump Denounces Riots, Cancel Culture, Failed Political Class In Speech (RT)

Speaking at the finale of the Republican National Convention, President Donald Trump doubled down on American exceptionalism and once again painted himself as an outsider fighting the Democrats and the entrenched establishment. The speech went on for over an hour, much longer than Joe Biden’s address a week ago at the Democratic convention. But whereas Biden spoke in an empty auditorium in Milwaukee, Trump spoke outside the White House, in the wilting heat of late summer in Washington, DC – and in front of more than a thousand people. In the absence of a formal party platform, Trump defined the Republican position for 2020 as undoing the damage done by the establishment; defending law and order from mobs and anarchy; fighting ‘cancel culture’ and making American great(er) again.

Though the tone of it was uneven – at times a campaign rally, at other times sounding like a State of the Union – and Trump was visibly running out of steam by the end, the underlying message was crystal clear. Time and again, Trump hammered Biden and the Democrats on the difference between their accomplishments during decades in power, and his over just one term. “We have spent the last four years reversing the damage Joe Biden inflicted over the last 47 years.” Trump painted Biden and the Democrats as globalists beholden to China economically, destroying American jobs and industries, opening the borders and starting endless foreign wars – which he was trying to end.

“How can Joe Biden claim to be an ally of the light, when his own party can’t even keep the lights on?” Trump joked, bringing up last week’s power outages in California – but it was also a dig at the theme of Biden’s speech last week, and the efforts by the media to accuse Republicans of being “dark and divisive.” “At no time before have voters faced a clearer choice between two parties, two visions, two philosophies, or two agendas,” Trump said. “This election will decide whether we save the American dream or whether we allow a socialist agenda to demolish our cherished destiny.” Democrats, Trump argued, see America as a wicked nation that must be punished for its sins, with giving them power as the only path to redemption. Yet Republicans – and most Americans, he argued – look to god for salvation, not politicians.

[..] Throughout, Trump cast himself as the outsider who left behind his comfortable life to battle the “failed political class” in Washington. He has done so with mixed success, dealing with brutal political intrigue, hostile media, endless lawfare, congressional gridlock, the ‘Russiagate’ probe and even an impeachment. But as he himself quipped, pointing to the White House, “we’re here and they’re not.” Even after four years of that, and an hour in the brutal heat of an August evening, Trump seemed ready, even eager, for more. Democrats may have believed the media and the polls to think this election was in the bag, but it isn’t – not by a long shot.

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I’m trying! I am! I’m trying to feel stupid for thinking that it’s great we finally found a way to make people NOT drive a car an hour+ every day that is 20x their weight and uses less than 10% of the energy effectively that moves it forward. I’m trying to feel stupid because, I know, the economy!

61 Million Americans Have Stopped Commuting (ZH)

A new survey from ValuePenguin.com, commissioned by LendingTree, found 61 million Americans have stopped commuting to work due to the virus-induced recession. The reduction of motor vehicles on highways will result in deep economic scarring across the entire economy. “The coronavirus has upended nearly every aspect of life in the United States, and Americans’ driving behavior and commutes are no exception. ValuePenguin surveyed drivers to see how their habits have changed. We found a large number of drivers are no longer commuting to the office, whether because they are working from home or have lost employment due to COVID-19.” -ValuePenguin. The survey found three in 10 respondents with motor vehicles are no longer making the daily commute to work in a post-COVID-19 world:


“About three in 10 consumers with a motor vehicle said they no longer have a commute due to COVID-19, either because they’re working from home (19%) or they temporarily or permanently lost their jobs (10%). On the other hand, 26% are back to their daily commute as of August, including essential workers (17%) and those whose employers reopened their offices (9%). (The remainder don’t have commutes either because they worked from home prior to the pandemic, or they were not working prior to the pandemic.)” -ValuePenguin [..] The decline in travel has resulted in respondents making fewer trips to the gas pump. Almost a third said they’re driving every day, compared to 50% of drivers pre-pandemic. The number of respondents who fill up their tanks every week dropped by 26% in August versus before the pandemic.

Read more …

Can we close them down now, finally? I get the point behind having a global health organization, but this is not that point. The WHO should have loudly denounced not being able to access Wuhan a long time ago.

WHO Skips Wuhan During China Trip; “Sat In Beijing For Three Weeks” (ZH)

A delegation from the World Health Organization tasked with investigating the origins of COVID-19 failed to go to Wuhan, China – ‘ground zero’ for the pandemic, and instead “sat in Beijing for three weeks” according to a senior US official, who told the Financial Times that Western governments are skeptical over China’s commitment to identifying the origins of the pandemic. “Any chance of finding a smoking gun is now gone,” the official continued. Though we’re not sure what any team of investigators would find after China blocked international epidemiologists for eight months after the outbreak began. Australian MP Dave Sharma told the Times: “The international community is right to have serious concerns about the rigour and independence of the WHO’s early response to this pandemic, and its seeming wish to avoid offending China.

“If this allegation is proven, it is another disturbing incident of the WHO — which is charged with safeguarding global public health — putting the political sensitivities of a member state above the public health interests of the world, in the critical early stages of this pandemic. We are all now bearing the immense costs of such a policy.” The WHO, meanwhile, says that the three-week visit was ‘merely laying the groundwork in advance of a full international mission,’ but gave no indication when this might happen. “After initially bristling at calls from Australia, the US and other countries for a probe into the outbreak, which has claimed more than 800,000 lives, Chinese president Xi Jinping in May endorsed a WHO-led inquiry.

But the WHO resolution “to identify the zoonotic source of the virus and the route of introduction to the human population” — which was backed by more than 130 countries — has been dogged by concerns over transparency and access.” -Financial Times. “A two-person WHO team has recently concluded its three-week assignment in China to lay the groundwork for an investigation into the source of the virus. This was in advance of the full mission, therefore, there are no ‘results of the WHO’s recent mission’ to share.”” said the UN agency in a statement last week.

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Like Russia cares. But shouldn’t we seek cooperation in things like this?

US Imposes Sanctions On Russian Institute That Developed COVID19 Vaccine (GZ)

The Russian government announced this August that it had registered the world’s first Covid-19 vaccine, called Sputnik V. Sputnik V was developed by the Russian Health Ministry’s Gamaleya Research Institute of Epidemiology and Microbiology. This scientific facility created the vaccine in a joint research project with the Russian Defense Ministry’s 48th Central Research Institute. On August 27, the US Commerce Department imposed sanctions on Russia’s 48th Central Research Institute, blacklisting the scientific body. While Russia took a state-led approach to create a coronavirus vaccine, the Trump administration announced a “public-private partnership” in May.


The program, called “Operation Warp Speed,” saw the US government dole out billions of tax dollars to Big Pharma companies. The Trump administration awarded massive contracts to private corporations like Novavax, Pfizer, and Moderna, while Trump reportedly offered “large sums of money” for exclusive rights to a vaccine being developed by a German firm so it could be sold for profit. But the US public-private partnership was unable to develop a vaccine before foreign countries with government-led research efforts did. Besides Russia, a state-owned Chinese company says its vaccine will be ready by the end of 2020, while Cuba is doing clinical trials for a vaccine of its own.

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It would really help to know what this mask mandate entails. Does it include people outside? In their own homes? These are important details.

Germany Imposes Fine For All Non-Mask Wearers In New National Crackdown (ZH)

It should surprise nobody that this happens first within the EU. While much of the world takes to mask-wearing more out of a social and health consciousness “most people are on board” type attitude, the government of Germany has announced fines as punishment for people not wearing them. Chancellor Angela Merkel announced during a virtual meeting Thursday with state governors that almost the entire country will be under a 50 euros minimum ($59) fine for breaching the national mask mandate. After the meeting it was announced that all federal states except the east’s Saxony-Anhalt agreed on setting a minimum fine. In her comments Merkel also urged Germans to stay home “wherever it is possible” and avoid traveling to “hot spots” like the United States. Berlin also agreed to impose a strict limiting on gatherings.


Not only have many major public events been canceled outright, but police are enforcing a ban on private parties of more than 25 persons. Large public events will not return until 2021. The new stringent measures including the mask fines go into effect by the end of the day Thursday. This also as most German schools are now back in session, though there’s been a handful of closures due to new coronavirus cases. It’s part of a broader initiative proposed by German health officials to crackdown on people flouting social distancing measures amid the pandemic, even though in recent weeks authorities say coronavirus clusters are due mainly to incoming vacationers. Germany’s confirmed COVID-19 numbers have been on the whole relatively low compared to other Western nations, at about 240,000 out of a population of 83 million.

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You sure it shouldn’t read they ARE the problem?

The Fed Policies Have Become Part Of The Problem (ZH)

In one of the most overt criticism of the Fed we have read to date, [Rabobank’s Philip] Marey writes that “while the Fed’s step to make the inflation target “more” symmetric may benefit the wages of the average American somewhere beyond 2022, it does not really address the deeper problem with the role the Fed is playing in the US economy. It could be argued that the Fed’s policies have become part of the problem, instead of the solution.” And, as the Rabobank strategist suggests, “at least this should be a topic for debate in the FOMC, instead of talking a whole year about whether to use an average or not.”

To this all we would add is that the Fed should take a long, hard look at its prefered metric of core PCE: as we have repeatedly explained in recent years, the Fed continues to purposefully undercount inflation, and on top of that, it now has openly said it will disregard the politically palatable core PCE/CPI number just so it can continue blowing an asset bubble of epic proportions. It was Marey’s conclusion however that was the piece de resistance:

“The much deeper problem for the US economy is the asymmetric impact of Fed policies on households and businesses. The Fed’s monetary and regulatory policies have contributed to a form of capitalism where the rewards are going to the 1% and the risks are borne by the 99%. The current crisis response has made it painfully clear again that the Fed’s policies benefit high income individuals and large corporations, while small businesses and low income individuals bear the burden. While the Fed likes to see itself as part of the solution to America’s economic problems, it should ask itself whether it is also part of these problems.”

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The amounts of leverage everywhere in the system makes a price decline of 10-20% an absolute catastrophy.

Subprime Mortgages Fall Massively Delinquent (WS)

The Federal Housing Administration (FHA) prides itself in insuring subprime mortgages with, as it says, “low down payments,” “low closing costs,” and “easy credit qualifying” – all true. Of its active portfolio of 8 million mortgages that it insures, 17% were delinquent in July, the highest rate in FHA history. In many metros, the delinquency rates of FHA mortgages are above 20%; and in two metros, the delinquency rates exceed 27%. The delinquency rates include mortgages that were delinquent and then entered a forbearance agreement with the lender, where the lender agreed to not pursue its rights due to nonpayment of the mortgage.

During the term of forbearance – six months, under the CARES Act, extendable by another six months – the borrower isn’t making payments, but the missed interest and principal payments are added to the mortgage balance and will need to be paid somehow. A FICO credit score below 620 is considered “subprime.” The FHA insures mortgages of borrowers with credit scores well below that. • If the borrower has a credit score of at least 580, the FHA will accept down payments of only 3.5%. • If the FICO score is below 580, no problem, but then down payment is 10%. Many of the people whose mortgages the FHA insures have lost their jobs or had had their hours or work reduced. In terms of the lenders, the good thing is that they don’t carry the risk. The FHA and thereby the taxpayer carry the risk.

In terms of the taxpayer, the good thing is that home prices have risen in many markets in recent years, and are rising there right now, and that many fallen-behind homeowners can sell their home and pay off the defaulted mortgage with the proceeds from the sale, and maybe have a little cash left over. And if the home goes into foreclosure because the proceeds wouldn’t have been enough to pay off the mortgage, the losses would be relatively small. The widespread home price declines that occurred during the subprime crisis of Housing Bust have not happened yet. And that’s why at the moment no one is panicking about these sky-high delinquency rates. But when millions of homeowners cannot make the mortgage payments and have to put these millions of homes on the market – forced sellers – they trigger a sudden surge of supply of homes for sale, and the entire supply-and-demand equation, and thereby the pricing environment, are going to change.

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No more Abenomics would be a plus.

Shinzo Abe, Japan’s Longest-Serving PM, Resigns Due To Health Issues (RT)

Prime Minister Shinzo Abe, who led Japan for eight consecutive years, has said he is stepping down hours after he informed his ruling coalition that he was suffering from health issues. Explaining his decision earlier in the day, Shinzo Abe said he feared the illness would affect his decision-making. “I will not be able to make proper judgments due to illness,” the outgoing premier clarified, as quoted by Kyodo news agency. Abe has been suffering from ulcerative colitis, an inflammatory chronic disease, for many years. The prime minister himself revealed that his condition started to worsen around the middle of the last month, possibly prompting him to consider stepping down.


Moving on, Abe apologized “from the bottom of my heart” to his fellow countrymen, adding that he didn’t want his resignation to cause trouble for Japan’s domestic politics. With his eyes getting misty, the prime minister said it is now up to the Japanese to judge his legacy. He noted that his administration had created four million jobs while keeping the economy going. Meanwhile, local media reported that he will continue to serve as prime minister until a new leader is chosen, thus avoiding the need to appoint an acting premier. Abe’s ruling Liberal Democratic Party (LDP) is reportedly set to arrange a leadership election next Thursday.

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Seems to have been okay so far?!

Laura Ravages Louisiana Coast With Wind Speeds Not Seen In A Century (Hill)

Hurricane Laura made landfall as a powerful Category 4 hurricane early Thursday morning packing 150 mile-per-hour winds and bringing a storm surge with the potential to inundate coastal areas of western Louisiana to the Texas border with up to 20 feet of water. Laura made landfall around 1 a.m. near Cameron, La. The 400-person community is more than 30 miles east of the Texas border. Around 7 a.m. CDT, the storm was centered near Leesville, La., roughly 100 miles north of the Gulf Coast. The storm ties with a hurricane from more than 160 years ago as the strongest storm to hit the region. A hurricane called “Last Island” made landfall in Louisiana as a Category 4 storm with 150 mph winds in 1856, according to CNN.


Laura weakened to a Category 2 hurricane after making landfall but still packs sustained winds of more than 100 mph and will continue to produce heavy rain and flash flooding that are not expected to recede for several days. Government officials had warned people to find safety and get out of harm’s way as the storm approached. More 500,000 people in the storm’s path in coastal Texas and Louisiana were under evacuation orders, although as many as 150 people in Cameron Parish, where the hurricane came ashore, ignored the orders and were unreachable as of Thursday morning, according to The Associated Press. “This is a time for all of us to be praying for the best, while we’re prepared for the worst. God bless you and your families,” Louisiana Gov. John Bel Edwards (D) tweeted just before the storm made landfall.

Read more …

 

 

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Feb 232020
 


Jack Delano Spectators at annual barrel rolling contest in Presque Isle, Maine 1940

 

COVID19 Cases Outside China Go Exponential (ZH)
Millions Of Chinese Ordered Back To Work (Obs.)
China’s 92% Car Sales Collapse Sign Of Sharp Trade Decline To Come (SCMP)
Trump Furious Americans Infected With Coronavirus Flown Back To US (Fox)
18 Koreans Test Positive For COVID-19 After Israel Pilgrimage (KH)
US Says Russia Behind Coronavirus Disinformation Campaign (G.)
Roger Stone Deserves A New Trial (Turley)
Julian Assange, Lawyers Were Secretly Recorded In Ecuador Embassy (ABC.au)
Subprime Credit Card Delinquencies Spike to Record High, Past Financial-Crisis Peak (WS)
Trump Reportedly Calls John Bolton A ‘Traitor’ And Wants To Block His Book (G.)
Trump: ‘Congrats Bernie…Don’t Let Them Take It Away From You!’ (SAC)

 

 

Cases 78,866 (+ 938 from yesterday’s 77,928).

Deaths 2,464 (+ 102 from yesterday)

 

• Italy: Thursday 3 cases, Sunday 115 cases, 89 in Lombardy, declares “national emergency”;
second death reported, first case in Milan city; much of Northern Italy put on lockdown. Top-level soccer games cancelled.

• South Korea: total 556 cases (10x increase in 5 days), 123 new cases, 1 new death

• Iran: 29 cases 6 deaths

• US: 35 cases, 200 under observation in San Diego

• Japan: 750 cases, 634 from Diamond Princess, Others triple in a week to 121

• Cases outside China go exponential

• WHO team visits Wuhan; will give Monday press conference

• 18 Koreans test positive after Israel pilgrimage. Israel Ministry of Health expects to close borders for non-residents soon

• Worldometer mortality rate for closed cases (recovered/discharged or dead) is 10%

 

From SCMP:

 

 

From Worldometer (note: mortality rate for closed cases is still 10%!)

 

 

 

 

Big week to come. Given all the new clusters forming, outside of China, things don’t look particularly good. Inside China there are efforts to start moving people around again, to work. Very risky. Many of the clusters and cases outside of Hubei are relatively new, so infection hasn’t worked its worst there.

COVID19 Cases Outside China Go Exponential (ZH)

South Korea reported 229 new confirmed cases on Saturday, as the number of infections more than doubled in a day to 433, an eightfold jump in just four days. [..] the number of new cases in South Korea has now doubled each day for the past 4 days, a true exponential increase. South Korea’s fourth-largest city, is where the initial cluster of cases of emerged; it has since been designated a “special management zone.” The central government is channeling medical support to the zone with more staff, hospital beds and equipment. In Daegu, more than half of South Korea’s cases have been among members of a secretive religious sect who often crowd together in worship, and their relatives or contacts.

Another 111 are patients or staff members at the Daenam Hospital in Cheongdo, where the two South Koreans who have died of the virus had been admitted. It gets worse: more than 1,250 members of the sect, the Shincheonji Church of Jesus, have reported potential symptoms, and officials are still trying to locate 700 members so they can be screened. “In accordance with law and principles, the government will sternly deal with acts that interfere with quarantine efforts, illegal hoarding of medical goods and acts that spark uneasiness through massive rallies,” Chung said, pointing out just how convenient the coronavirus will be when government seek to squash all future protests.

It gets even worse: Samsung, the world’s biggest smartphone maker, shut down a factory after a worker tested positive. The factory, located in the city of Gumi, about an hour north of Cheongdo, is expected to resume operations on Monday morning, Samsung said. But the floor of the factory where the patient has worked will be closed until Tuesday morning, it said. We wonder how long until it truly reopens. But the scariest development in the past 24 hours is that almost all patients at a psychiatric ward of a South Korean hospital tested positive for the coronavirus, with local reports saying members of the abovementioned Shincheonji Church of Jesus sect which has rapidly emerged as the single biggest cluster of new S. Korean cases, had attended a funeral in the same complex.

South Korea’s two confirmed deaths from the virus were also from the Daenam Hospital in Cheongdo hospital’s mental health division, Korea’s Centers for Disease Control and Prevention said Saturday. Both patients had been moved out of the psychiatric ward for medical treatment before their deaths, Vice Health and Welfare Minister Kim Kang-lip said at a briefing. In other words, of the total 443 confirmed cases, more than half, or 231 were linked to Daegu, sect, while at least 111 – including four nurses – were from the psychiatric ward of the hospital in Cheongdo County. The two clusters account for almost 80% of the confirmed cases.

Read more …

Dumb understatement: “An influential Chinese economist has already warned that the coronavirus crisis could slice a full percentage point off growth this year”

Millions Of Chinese Ordered Back To Work (Obs.)

The Chinese authorities are trying to usher the country back to work, a month after announcing the unprecedented quarantine of millions of people. But they face a difficult balancing act between containing the virus and supporting a faltering economy. Wuhan and surrounding Hubei province, the centre of the outbreak, have been the focus of disease prevention efforts. over the last four weeks. As the death toll climbed to more than 2,000 worldwide, and infections to over 75,000, the vast majority of cases were still inside that quarantined zone. But the disease had spread far across the country before Hubei was sealed off, and some of the worst-affected places are the manufacturing and economic centres that power China’s economy.

Southern Guangdong province, just across from Hong Kong and home to international giants such as Apple supplier Foxconn, is the second-worst affected province after Hubei, with 1,339 cases of the coronavirus confirmed and five deaths. Eastern Zhejiang, near Shanghai, is the fourth most seriously hit, with 1,205 cases by , although only one death. It is also the base for companies including the hugely influential Alibaba, China’s answer to Amazon and eBay. Those total numbers of infections are far above the 639 cases registered across all of China on 23 January, when Hubei was put on sudden lockdown. The situations are not directly comparable; coronavirus had been spreading almost unchecked in Wuhan for weeks before the quarantine, and overwhelmed hospitals appear to have sent patients home, only to spread the disease.

Authorities in other areas started tracking cases much earlier and have better resources to isolate and treat those who fall sick, something reflected in a much lower death rate. The speed of the disease’s spread is perhaps not surprising given Wuhan’s position as a regional economic hub, with links to other key centres, and the fact that the coronavirus has proved contagious in the early days of infection when patients have few symptoms, making it hard to identify carriers as clusters spread. Yet China cannot afford for its factories to sit idle, or its restaurants and shops to stay empty indefinitely. Authorities were already worried about faltering growth after last year saw the slowest rate of expansion in almost three decades; GDP growth had not slid so low since 1990, when China was isolated in the aftermath of the Tiananmen Square massacre.

An influential Chinese economist has already warned that the coronavirus crisis could slice a full percentage point off growth this year. So authorities are trying to balance two unfathomable risks – of either fuelling the coronavirus by pushing too much for normal routines, or paving the way for the collapse of their local economy by keeping everything on lockdown. Many small and medium companies in particular are already hovering on the brink, and a wave of bankruptcies is expected. Retail and hospitality companies expected bumper sales over the lunar new year, and even factories that closed for the holiday expected to reopen in early February.

[..] In Shenzhen, the border city that has come to rival Hong Kong, businesses have been told they can resume work immediately if they have virus control measures that include disinfecting, giving employees at least two masks a day, making temperature checks, and having their plans approved by local officials. There is already a gap between regulation and reality, however. “We started today, but the boss only gave us one mask when we all know he’s supposed to give out two,” said one 52-year-old woman employed at a Shenzhen factory making plastic items such as skateboard wheels, cups and toy parts. “My husband, who works at a restaurant near here, is also only getting one mask per day,” she added, giving only her last name, Xiao, over fears of being fired or getting her boss into trouble.

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Why would anyone expect sales to pick up anytime soon?

China’s 92% Car Sales Collapse Sign Of Sharp Trade Decline To Come (SCMP)

A 92 per cent drop in car sales in China in the first half of February provided the first real indicator of the economic impact of the coronavirus epidemic, with officials also warning of a sharp decline in Chinese exports and imports for the first two months of the year. The China Passenger Car Association (CPCA) on Friday said that sales dropped to just 4,909 units in the first 16 days of the month, down from 59,930 vehicles in the same period a year earlier. “Very few dealerships opened in the first weeks of February and they have had very little customer traffic,” said the CPCA. China’s car market is likely to see sales slide more than 10 per cent in the first half of the year due to the outbreak, and around 5 per cent for the whole year, provided the virus is effectively contained before April, the country’s top industry body, the China Association of Automobile Manufacturers (CAAM), said last week.

The sector was already under pressure from the cooling economy, with car sales falling 3 per cent in 2018 in the first sales contraction since the 1990s, and 8.2 per cent in 2019, CAAM said. “We must firmly believe that China’s auto market still has great development space and potential, and the automobile consumption demand is still strong,” Wang Bin, vice-director of the commerce market operation department at the commerce ministry, said on Thursday. To stabilise the market, in which more than 25 million vehicles were sold last year, China’s commerce ministry said it will introduce more measures to boost consumption.


Li Xingqian, head of foreign trade at the Ministry of Commerce, said the growth rate for China’s exports and imports would decline sharply in the January-February period due to a collapse in logistics and the delayed start of work following the extended Lunar New Year holiday, which was aimed at controlling the coronavirus outbreak.

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Simply not their call to make.

Trump Furious Americans Infected With Coronavirus Flown Back To US (Fox)

President Trump was furious that 14 Americans infected with the coronavirus returned to the United States without his permission rather than remain in quarantine overseas, according to a new report. Trump had been briefed that the healthy U.S. passengers who spent weeks quarantined aboard the Diamond Princess cruise ship in Japan would be allowed to fly home on two chartered planes – while those who were sick or infected would stay in Japan to prevent the spread of the deadly virus. The president became “furious” with senior advisers after learning the 14 Americans who tested positive had been put on a plane with healthy passengers, according to The Washington Post.


One official told the paper that the failure to inform Trump of the decision in advance of the plane’s departure was a “big operational mistake.” Trump complained that bringing home the infected Americans could damage the adminstratration’s response to the global health outbreak. While the Americans evacuated from the ship were on buses on the tarmac in Tokyo, U.S. officials got the results back that 14 had tested positive for COVID-19 but had not yet shown symptoms. Officials made the decision to have them fly home anyway, but “isolated” from the other passengers on the plane.

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“The South Korean government lodged a complaint with Israel over its abrupt entry ban against South Koreans over concerns about the new coronavirus: “demand that such an incident not occur again”

18 Koreans Test Positive For COVID-19 After Israel Pilgrimage (KH)

Of 76 Koreans who traveled to Israel for religious pilgrimages in February, 18 tested positive for the deadly coronavirus upon returning home, local health authorities said Sunday. Two groups of Roman Catholic travelers stayed in Israel for about a week each for religious tourism earlier this month, visiting packed religious sites. Among 39 Koreans from North Gyeongsang Province who visited Israel from Feb. 8-16, 18 have been confirmed positive, including a tour guide residing in Seoul. A 59-year-old woman who lives in Yecheon County, North Gyeongsang Province, was the first confirmed patient. She was unable to go to work upon arrival due to a high fever and respiratory problems.


Local health authorities are scrambling to narrow down the exact times when the patients could have been infected, leaving open the possibility that a group member may have caught the virus prior to departure or somewhere along the travel route either in Israel or Korea. Another group of 37 people from Jeju Island traveled to Israel from Feb. 11-21, and one person with a cough was waiting for their test results as of Sunday afternoon. The presence of COVID-19 in these Korean tourists, as well as the skyrocketing number of confirmed cases here, prompted Israel to bar travelers from Korea from entering the country, the Israeli government said. As a result, some 130 Koreans who landed in Tel Aviv on Saturday evening, local time, were sent back to Korea after being denied entry.

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Using the same accounts they use for Syria, Yellow Vests etc. Just to make it easier for those smart Americans to figure out it’s them. That’s also why they [..] “carry messages similar to Russian-backed outlets such as RT..” You know, just so Americans don’t get all confused and stuff.

US Says Russia Behind Coronavirus Disinformation Campaign (G.)

Thousands of Russian-linked social media accounts have launched a coordinated effort to spread misinformation and alarm about coronavirus, disrupting global efforts to fight the epidemic, US officials have said. The disinformation campaign promotes unfounded conspiracy theories that the US is behind the new coronavirus outbreak, in an apparent bid to damage America’s image around the world. State department officials tasked with combatting Russian disinformation told the AFP false personas were being used on Twitter, Facebook and Instagram to advance Russian talking points in multiple languages.

“Russia’s intent is to sow discord and undermine US institutions and alliances from within, including through covert and coercive malign influence campaigns,” said Philip Reeker, acting assistant secretary of state for Europe and Eurasia. “By spreading disinformation about coronavirus, Russian malign actors are once again choosing to threaten public safety by distracting from the global health response,” he said. Some accounts have falsely claimed the US is waging “economic war on China” and that the virus is a biological weapon manufactured by the CIA.


[..] Several thousand online accounts – previously identified for airing Russian-backed messages on major events such as the war in Syria, the Yellow Vest protests in France and Chile’s mass demonstrations – are posting “near identical” messages about the coronavirus, according to a report prepared for the state department’s Global Engagement Center and seen by the AFP. The accounts are run by humans, not bots, and post at similar times in English, Spanish, Italian, German and French. They can be linked back to Russian proxies, or carry messages similar to Russian-backed outlets such as RT and Sputnik, the report said.

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Turley doesn’t acknowledge why Stone was dragged in front of Congress. Which was on a completely fabricated charge. That Stone himself did some of the fabricating seems a bit beside the point. I would be interested in Turley’s view on that, rather thann the obvious bias involved.

Roger Stone Deserves A New Trial (Turley)

With his sentencing this week, “agent provocateur” Roger Stone finally provoked himself into prison. However, his latest “performance art” may be nowhere near its conclusion. That is not because he has a “very good chance of exoneration,” as President Trump himself predicted. Stone has about the same chance of exoneration as he does of canonization. Rather, it is not clear that Stone received a fair trial due to alleged juror bias or, even if his trial is now finished, whether it will become undone by a presidential pardon. If nothing else, one thing should be clear. Stone holds a far greater claim to a new trial than to a presidential pardon. The decision of Judge Amy Berman Jackson to move forward with his sentencing was a surprise to many of us, following disturbing reports of potential juror bias by the trial foreperson.

It was a curious twist on the position of the Queen of Hearts in Alice in Wonderland, who declared, “Sentence first! Verdict afterwards.” In this case, the court decided to resolve the sentence before resolving if there was a valid verdict. I have previously discussed the statements made by Tomeka Hart before she became the jury foreperson. She exhibited intense hostility against Trump and his associates and protested against the administration. She also expressed support for investigations of the administration and even discussed this case. Worse yet, the transcript of the voir dire hearing did not suggest that the defense counsel was aware of this history. Either she disclosed the information and defense counsel was less than effective, or Hart had withheld the information and was less than transparent.


Jackson may have two equally unappealing choices. First, the court could order a new trial, making this sentencing drama a meaningless exercise. Second, she could dismiss any concerns as speculative and refuse to take any action. Such a decision would make a mockery of the jury selection process. What is the value of voir dire if a juror with such alleged bias can find her way not just onto the jury but into the position as foreperson?

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Roger Waters: “We will speak so loudly even the deaf will hear. We will write so clearly even the blind will read. You write injustice on the earth. We will write revolution in the sky.”

Julian Assange, Lawyers Were Secretly Recorded In Ecuador Embassy (ABC.au)

The case is being investigated by Spain’s federal court, the Audencia Nacional, which is examining whether Morales and UC Global are guilty of breaching both Assange’s privacy and lawyer-client privilege, as well as crimes relating to misappropriation of funds, bribery, and money laundering. “From 2015 to mid-2018, when UC Global lost the embassy’s security contract, a battery of illegal espionage measures was deployed, with massive interference in the privacy of [Assange], in his communications with his [legal] team, in meetings with his doctors, and in general against everyone close to him,” a criminal complaint filed by Assange’s Spanish lawyers stated.

“In those years the defendants created a sort of ‘Big Brother’ in which all the movements of Mr Assange and the people close to him were monitored.” The case commenced after a group of Spanish citizens contacted senior WikiLeaks employees and demanded a significant sum of money in return for what they said was voluminous proof of the espionage. A former UC Global employee — who cannot be identified for legal reasons — also separately approached WikiLeaks, wanting to reveal what they saw as the illegal behaviour of their former company. WikiLeaks referred the case to Spanish courts, who launched an investigation and arrested Morales. He was later released on bail. “This spying did not only affect Mr Assange’s lawyers, it also affected all of his visitors, including journalists,” Martinez said.

“It got to the point where, during a visit to Mr Assange, the head of Ecuador’s intelligence service [Rommy Vallejo, on December 21, 2017] was also spied on,” Martinez added. “In the meeting between Mr Vallejo and Mr Assange the possible release [from the embassy] of Mr Assange in a few days later was discussed.” Within hours of that secret meeting, which was known to only a few people, the US Ambassador to Ecuador complained to Ecuadorian authorities, and the next day the US issued an international arrest warrant for Assange, Martinez said. “That leads us to believe that the conversation was urgently sent to the US authorities and that they urgently issued the international arrest warrant the next day,” he said.

Martinez was himself spied on while having legal meetings with Assange at the embassy. “Mr Assange began to suspect that he was being spied upon … so he asked us to hold the most sensitive meetings in the women’s toilet at the back of the building,” Martinez recalled. “We honestly thought it was an exaggerated step to hold our legal meetings in the women’s toilet, where he would even open the water tap to avoid anyone listening. “It was interesting to find out that Mr Assange was, in fact, correct: the material before the court proves that UC Global knew the meetings were held inside the women’s toilet, as they proceeded to install an additional microphone [there].”

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Meanwhile in the not-yet-infected part of the world:

Subprime Credit Card Delinquencies Spike to Record High, Past Financial-Crisis Peak (WS)

The rate of credit card balances that are 30 days or more delinquent at the 4,500 or so commercial banks that are smaller than the top 100 banks spiked to 7.05% in the fourth quarter, the highest delinquency rate in the data going back to the 1980s (red line). But at the largest 100 banks, the credit-card delinquency rate was 2.48%, which kept the overall credit-card delinquency rate at all commercial banks at 2.7% (blue line), though it was the highest since 2012, according to the Federal Reserve. What’s going on here, with this bifurcation of the delinquency rates and what does that tell us about consumers?

Clearly, those consumers that have obtained credit cards at the smaller banks are in a heap of trouble and are falling behind at a historically high rate. But consumers that got their credit cards at the big banks – lured by 2% cash-back offers and other benefits that are being heavily promoted to consumers with top credit scores – do not feel the pain. A similarly disturbing trend is going on with auto loans. Seriously delinquent auto loans jumped to 4.94% of total auto loans and leases outstanding. This is higher than the delinquency rate in Q3 2010 amid the worst unemployment crisis since the Great Depression. On closer inspection, there was that bifurcation again; prime-rated loans had historically low delinquency rates; but a shocking 23% of all subprime loans were 90+ days delinquent.

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“I give the guy a break,” he added. “I give him a job. And then he turns on me. He’s just making things up.”

Trump Reportedly Calls John Bolton A ‘Traitor’ And Wants To Block His Book (G.)

John Bolton is “a traitor” and his book should not be published before the election in November, Donald Trump reportedly told aides and media figures. The president’s views on news of a book deal for Marie Yovanovitch, another key figure in the Ukraine scandal which led to Trump’s impeachment, were not immediately clear. Bolton, a former ambassador to the UN, was Trump’s third national security adviser until he was fired in September last year. He refused to testify in the House impeachment inquiry into Trump’s attempts to have Ukraine investigate his political rivals, which resulted in two articles of impeachment, concerning abuse of power and obstruction of Congress.

He offered to testify in the Senate but Republicans voted not to call witnesses during a trial which duly ended in Trump’s acquittal, despite leaks from Bolton’s book manuscript seeming to show he possessed key knowledge about the affair. The Room Where It Happened was slated for publication in March but it has been held up, the national security council telling Bolton’s lawyer it would “move forward as expeditiously as possible” with determining what could be published. On Friday night, the Washington Post cited two anonymous sources as saying Trump had told his own lawyers the book should not come out before the election.


Trump has attacked Bolton publicly on Twitter but the Post also reported notes of an off-the-record briefing of TV anchors on 4 February. “We’re going to try and block the publication of the book,” Trump reportedly said. “After I leave office, he can do this. But not in the White House. “I give the guy a break,” he added. “I give him a job. And then he turns on me. He’s just making things up.”

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CNN’s desperate attempt to attract a handful viewers still bores me to tears. Andrew Yang and Donald Trump know what’s wrong.

Trump: ‘Congrats Bernie…Don’t Let Them Take It Away From You!’ (SAC)

President Trump congratulated Bernie Sanders in his projected win in democratic primary in Nevada. As of Saturday evening, Sanders is leading with 53.84 percent of the vote in the Nevada caucuses. “Congratulations Bernie, & don’t let them take it away from you!” he added in a tweet. “Looks like Crazy Bernie is doing well in the Great State of Nevada,” Trump wrote. “Biden & the rest look weak, & no way Mini Mike can restart his campaign after the worst debate performance in the history of Presidential Debates.” Trump followed with another tweet, quoting Jon Scott of Fox News, on a report that showed Sanders having strong support from within the Kremlin. “The Kremlin is reportedly backing Bernie Sanders bid to win the White House.” Jon Scott @FoxNews,” the president wrote. “Why didn’t somebody tell me this?”

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Feb 122020
 


Dorothea Lange Daughter of white tobacco sharecropper at country store. Person County, North Carolina 1939

 

China Reports 97 New Deaths, 2,059 New Cases Confirmed (SCMP)
Coronavirus Cases Fall, Experts Disagree Over Whether Peak Is Near (R.)
Japan Cruise Ship Virus Cases Jump To 175 (R.)
At Least 500 Wuhan Medical Staff Infected With Coronavirus (SCMP)
China’s Banks Face $6 Trillion Coronavirus Cataclysm (ZH)
China Home Sales Crash In First Week Of February ‘Worse Than SARS’ (ZH)
Trump Swipes At Resigned Prosecutors, Judge In Roger Stone Case (Hill)
Despite Iowa Fiasco, Nevada Democrats Plan to Use New Software “Tool” (Webb)
Executive Order (Kunstler)
Third Whistle-Blower Comes Forward To Corroborate Complaints About OPCW (RT)
Subprime Auto Loans, Serious Delinquencies Soar. These Are the Good Times (WS)
Job Openings Plunge the Most Since the Great Recession (WS)
How Unfunded Pensions Will Destroy Your Retirement (Raoul Pal)
Volkswagen and Daimler Push For More ‘Sustainable’ Chile Lithium (R.)

 

 

And there we go once more with the Covid19 statistics (will that new name ever stick?):

 

• Deaths: 1,115, up 97 from yesterday’s 1,108


• Cases: 45,171, up 2059 from yesterday’s 43,112

 

“Everyone” is saying the numbers are going down, and that must mean we’re over the peak, or something.

But I quoted Ben Hunt yesterday in Corona Cartoon Numbers as saying the numbers conformed to a simple quadratic function, and speaking in the “voice” of Xi Jinping:

Yesterday we told everyone that 500 people have died since the outbreak. That’s a made-up number, of course, but that’s what we told everyone. Today let’s tell everyone that an additional 15% of that number died yesterday, so 75 new deaths for 575 total dead. And tomorrow let’s tell everyone that 14% of that total number died, and the day after 13%, and then 12% and then 11%. Clear progress!

That was in reaction to this predicted sequence Hunt saw presented by Antimonic:

 

 

My updated interpretation of this was:

Today according to “official” numbers we have 43,103 cases and 1,018 fatalities, which is up 108 from yesterday’s 910. What’s that, 10.5%? Close enough for discomfort.

And sure enough, today’s 97 deaths constitute 9.5% of yesterday’s 1,108. If this sequence holds (note that it was never meant as anything precise, just a trend), tomorrow’s new added deaths should be around 8.5% of 1,115, or 93-96 deaths. Let’s see. If that is correct, we know Beijing has been reporting false deaths numbers according to that quadratic “formula” -we already know, really.

 

 

 

You wait 2,5 months to name the thing, and then expect everyone to use that name?

China Reports 97 New Deaths, 2,059 New Cases Confirmed (SCMP)

China’s health authority reported 97 new deaths attributable to the Covid-19 outbreak and 2,015 newly-confirmed cases as of Tuesday. This brings the national totals to 1,113 and 44,653, respectively. As of yesterday, 744 recovered patients have been discharged, while the total number of recovery cases stands at 4,740. Outside Hubei province – epicentre of the Covid-19 epidemic – new infections on the mainland fell for the eighth consecutive day. Health authorities in Hubei reported 94 new deaths attributable to the contagion, and 1,638 newly confirmed cases as of Tuesday. This brings the totals announced by the province’s health commission to 1,068 and 33,366, respectively.


Officials in Hubei had reported 103 fatalities and 2,097 newly confirmed cases a day earlier. Some 1,104 of the new cases announced were confirmed in Hubei’s capital of Wuhan, where the virus is believed to have originated at a seafood and meat market. The figures from Hubei on Tuesday mark the lowest number of newly confirmed cases since the beginning of February. It is also the first time that Hubei has reported fewer than 2,000 new daily cases since February 2. Michael Ryan, the World Health Organisation’s head of emergency programmes, said on Tuesday in Geneva that Covid-19 had the potential to spread faster than either the Ebola or Sars viruses. Earlier this week, Covid-19 exceeded the Sars outbreak of 2002-03 in terms of deaths attributed to it.

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“China’s foremost medical adviser on the outbreak, Zhong Nanshan..” Who said two weeks ago it would all be over within a week or ten days. “China’s foremost medical adviser on the outbreak”. Zhong now says: “I hope this outbreak or this event may be over in something like April..”

Coronavirus Cases Fall, Experts Disagree Over Whether Peak Is Near (R.)

China on Wednesday reported its lowest number of new coronavirus cases since late January, lending weight to a prediction from its senior medical adviser that the outbreak could be over by April. Global markets took heart from the outlook but other international experts remain alarmed by the spread of the flu-like virus, which has killed more than 1,100 people, all but two in mainland China, and said optimism could be premature. China’s foremost medical adviser on the outbreak, Zhong Nanshan, said the numbers of new cases were falling in some provinces, and forecast the epidemic would peak this month.

“I hope this outbreak or this event may be over in something like April,” Zhong, an epidemiologist whose previous forecast of an earlier peak turned out to be premature, told Reuters on Tuesday. Total cases of the new coronavirus in China have hit 44,653, according to health officials, including 2,015 new confirmed cases on Tuesday. That was the lowest daily rise in new cases since Jan. 30. China last week amended its guidelines on prevention and control of the coronavirus, saying that only when asymptomatic cases show clinical signs should they be recorded as a confirmed case. However, it is not clear if the government data previously included asymptomatic cases. The number of deaths on the mainland rose by 97 to 1,113 by the end of Tuesday.

While Chinese officials said the situation was under control, the World Health Organization (WHO) warned the epidemic posed a global threat potentially worse than terrorism. The world must “wake up and consider this enemy virus as public enemy number one”, WHO chief Tedros Adhanom Ghebreyesus said on Tuesday, adding the first vaccine was 18 months away. Asked about Zhong’s prediction, Australia’s chief medical officer, Brendan Murphy, said: “I think it’s far too premature to say that.” “We’ve just got to watch the data very closely over the coming weeks before we make any predictions,” he told the Australian Broadcasting Corp, while praising China’s “Herculean efforts” to contain the virus.

[..] Even if the epidemic ends soon, it has already taken a toll on China’s economy, with companies laying off workers and other firms needing loans running into billions of dollars to stay afloat. Supply chains for car manufacturers to smartphone makers have broken down. Wu Chaoming, chief economist at Fortune Securities, wrote in a report that the impact on China’s labor market would be far greater than that of a 2002-2003 outbreak of another coronavirus that caused Severe Acute Respiratory Syndrome. About 24% of the labor force, or 186 million people, “could face some risks in salary reduction or even being laid off”, he said. ANZ bank said China’s first-quarter growth would likely slow to 3.2-4.0% compared with an earlier projection of 5.0%. China’s aviation regulator urged countries to lift virus-related travel restrictions as soon as possible, but airlines showed no sign of easing their curbs on flights.

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Highest concentration of infections outside of China.

Japan Cruise Ship Virus Cases Jump To 175 (R.)

Another 39 people have tested positive for the coronavirus on the quarantined Diamond Princess cruise ship in Japan as well as one quarantine officer, bringing the total to 175, the health ministry said on Wednesday. The Diamond Princess was placed in quarantine for two weeks upon arriving in Yokohama, south of Tokyo, on Feb. 3, after a man who disembarked in Hong Kong was diagnosed with the virus. About 3,700 people are aboard the ship, which usually has a crew of 1,100 and a passenger capacity of 2,670. The ministry said tests are being conducted for others who are deemed to need them and it will announce the results later.


The U.K.-flagged Diamond Princess is managed by Princess Cruise Lines, one of the world’s largest cruise lines and a unit of Carnival Corp. The government was considering allowing elderly and those with chronic illnesses to disembark before the Feb. 19 target date for ending the quarantine, some media reported, but added it would take time to figure out where they could be sent. As of last week, about 80% of the passengers were aged 60 or over, with 215 in their 80s and 11 in the 90s, the English-language Japan Times newspaper reported.

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Yup. Poor hygiene.

At Least 500 Wuhan Medical Staff Infected With Coronavirus (SCMP)

At least 500 hospital staff in Wuhan had been infected with the deadly new strain of coronavirus by mid January, multiple medical sources have confirmed, leaving hospitals short-staffed and causing deep concern among health care workers. While the government has reported individual cases of health care workers becoming infected, it has not provided the full picture, and the sources said doctors and nurses had been told not to make the total public.
The reason for this edict was not explained, but the authorities have been trying to boost morale among frontline medical staff, especially following the death of Li Wenliang, who was killed by the disease weeks after being reprimanded by police for warning colleagues about the new virus.


A slide circulating online, however, reveals the scale of infections among medical workers in Wuhan. It said that by mid-January there had been about 500 confirmed cases among hospital staff with a further 600 suspected ones. A source from a major hospital in Wuhan with knowledge of the situation confirmed that the slide was authentic. The figures shown on the slide were also in line with the figures given by two other doctors from major hospitals in Wuhan.

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How many businesses and banks can the PBOC save if the virus lasts into April or beyond?

China’s Banks Face $6 Trillion Coronavirus Cataclysm (ZH)

In a little noticed post back in November, we reported that as part of a stress test conducted by China’s central bank in the first half of 2019, 30 medium- and large-sized banks were tested; In the base-case scenario, assuming GDP growth dropped to 5.3% – nine out of 30 major banks failed and saw their capital adequacy ratio drop to 13.47% from 14.43%. In the worst-case scenario, assuming GDP growth dropped to 4.15%, some 2% below the latest official GDP print, more than half of China’s banks, or 17 out of the 30 major banks failed the test. Needless to say, the implications for a Chinese financial system – whose size is roughly $41 trillion – having over $20 trillion in “problematic” bank assets, would be dire.

Why do we bring this up now? Because according to many Wall Street estimates, as a result of the slowdown resulting from the Coronavirus pandemic, China’s economic growth is set to slow sharply, with some banks such as JPMorgan now expecting as little as 1% GDP growth in Q1 assuming the epidemic is contained in the next few weeks; if it isn’t, Chinese Q1 GDP growth may print negative for the first time on record. This is a big problem, because as noted above if the PBOC’s 2019 stress test is credible, more than half of China’s banks would fail the “stress test” should GDP drop to just 4.15%; and one can only imagine what happens to China’s banks if GDP prints negative.

Or, alternatively, one can read the fine print, where we find that among the immediate first order consequences of a GDP crunch is that the bad loan ratio at the nation’s 30 biggest banks would rise five-fold, flooding the country with trillions in non-performing loans, and potentially unleashing a tsunami of bank defaults. [..] “The banking industry is taking a big hit,” You Chun, a Shanghai-based analyst at National Institution for Finance & Development told Bloomberg. “The outbreak has already damaged China’s most vibrant small businesses and if it prolongs, many firms will go under and be unable to repay their loans.” [..] .. a recent nationwide survey showed that about 30% [of small businesses] expect to see revenue plunge more than 50% this year because of the virus and 85% said they are unable to maintain operations for more than three months with cash currently available.

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“..new apartment sales crashed 90% in the first week of February..[..] .. Sales of existing homes in 8 cities plunged 91% over the same period..”

That can’t last long, but: “Real estate transactions have been forbidden in many cities.”

Seen more reports on that seconnd pic: the virus spreading through pipes in buildings.

China Home Sales Crash In First Week Of February ‘Worse Than SARS’ (ZH)

Bloomberg cited a new report via China Merchants Securities (CMSC) that said new apartment sales crashed 90% in the first week of February over the same period last year. Sales of existing homes in 8 cities plunged 91% over the same period. “The sector is bracing for a worse impact than the 2003 SARS pandemic,” said Bai Yanjun, an analyst at property-consulting firm China Index Holdings Ltd. “In 2003, the home market was on a cyclical rise. Now, it’s already reeling from an adjustment.” Long before the coronavirus outbreak, China’s housing market has been on shaky grounds amid declining demand, stricter mortgage requirements, and price discounts.

The latest shock: two-thirds of China’s economy has come to a standstill, could generate enough pessimism to pop the country’s massive housing bubble. After all, coronavirus is a mass distraction from the overall domestic problems the Communist Party of China (CPC) faces. The CPC failed to stimulate the economy last year, with credit impulse not turning up as expected. The virus outbreak has allowed the CPC to scapegoat the slowdown and the inevitable crash. “…China’s ability to stimulate its economy is now virtually nil, since China’s record debt load has now made it virtually impossible to push the country’s credit impulse higher,” we noted last week. Real estate transactions have been forbidden in many cities. This means fire sales could be seen once selling restrictions end.

E-House China Enterprise Holdings Ltd.’s research institute said four units per day were being sold in Beijing last week, and this is down from several hundred per day during the same period in the previous year. China International Capital Corp. analyst Eric Zhang said demand could pick back up in April, assuming the virus outbreak is under control.

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The 4 prosecutors in the Roger Stone case should be investigated. They won’t be, if only because they’re not independent. But this feels like sour grapes for the Mueller report failure.

Stone is a dirty trickster, but he’s been that for decades, and he’s only one of many in DC, on both sides. You can’t be locked up for that. Stone faces two main allegations, IIRC:

1) Lying about his link to WIkiLeaks/Russia. But we know Stone never had any such links. He lied to the Trump campaign about having them though, and then to the DOJ about that. But in essence, he was lying about something that never existed.

Sentencing him for that serves only to keep the illusion alive (just like the coward Rober Mueller did), that WikiLeaks had Russia links, and it’s high time to get rid of that ridiculous notion once and for all.

2) Stone is accused of threatening Randy Credico, his friend who testified to the DOJ. Or more specifically, he’s accused of threatening to kill Credico’s dog, Bianca. Credico wrote to Judge Amy Berman last month pleading with her NOT to send Stone to prison, and saying neither the threats against him or Bianca were serious.

Summarized, there are (were) 4 prosecutors who wanted to send Stone to prison for 9 years for threatening a dog, which according to the dog’s owner wasn’t even a real threat. And if the DOJ or Barr or Trump criticize this, they become the accused, “lawless”, parties.

Trump Swipes At Resigned Prosecutors, Judge In Roger Stone Case (Hill)

President Trump on Tuesday swiped at the prosecutors and judge in the case of longtime confidant Roger Stone amid the fallout of the Justice Department’s decision to intervene in Stone’s sentencing recommendation. Trump weighed in on the sentencing late Tuesday even as Democrats and critics expressed alarm that the president seemed to be blurring the line between the executive branch and the Department of Justice (DOJ). “Who are the four prosecutors (Mueller people?) who cut and ran after being exposed for recommending a ridiculous 9 year prison sentence to a man that got caught up in an investigation that was illegal, the Mueller Scam, and shouldn’t ever even have started? 13 Angry Democrats?” Trump tweeted.

All four prosecutors who worked on Stone’s case resigned Tuesday after the DOJ asked a federal court to reduce the seven- to nine-year prison sentence they had originally recommended. One prosecutor, Aaron Zelinsky, worked on former special counsel Robert Mueller’s team. Stone, a 67-year-old right-wing provocateur, was found guilty in November of lying to Congress and witness tampering related to his efforts to provide the Trump campaign inside information about WikiLeaks in 2016. The timing of the DOJ’s involvement raised questions given that it came hours after Trump ridiculed the initial recommendation as a “miscarriage of justice” and previous accusations from Democrats that Attorney General William Barr has interceded at times in the president’s favor.

The president later told reporters he had not spoken with DOJ officials about Stone’s case but insisted he had the right to do so. He declined to say whether he was considering commuting Stone’s eventual sentence. “All starting to unravel with the ridiculous 9 year sentence recommendation!” Trump tweeted Tuesday night. Trump late Tuesday also swiped at D.C. District Judge Amy Berman Jackson, who is overseeing the Stone case, implying she had treated his former campaign chairman unfairly. “Is this the Judge that put Paul Manafort in SOLITARY CONFINEMENT, something that not even mobster Al Capone had to endure? How did she treat Crooked Hillary Clinton? Just asking!” Trump tweeted.

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The most boring show on TV. If you watch it or g-d forbid write about it, I feel for you.

Iowa: screwed up app, and ButtGeek gets bought into contention.

New Hampshire: Klobuchar gets bought into contention.

All of a sudden Warren and Biden are gone, and two no-no’s are Sanders’ only rivals left?

Despite Iowa Fiasco, Nevada Democrats Plan to Use New Software “Tool” (Webb)

Even while the chaos of the recent Iowa Caucus remains fresh in voters’ minds, the Nevada State Democratic Party is setting itself up for more of the same by using a new software application for reporting results that is set to be coded and tested in less than a month. The application, still currently under development, will come preloaded onto iPads that will be distributed to precinct chairs during Nevada’s upcoming caucus, scheduled for February 22. The scramble to create this new application followed revelations that the same company that had developed the software largely blamed for the Iowa debacle – known as Shadow Inc. – had also developed the two applications that Nevada Democrats had planned to use both for early voting and for Caucus Day.

[..] .. the Shadow Inc. app was reported to have been developed over a period of roughly two months, though the company’s CEO, Gerard Niemira, has since claimed that the app’s creation began last August. In contrast, Nevada Democrats are now slated to use a software application developed in less than half that time [..] Another issue is the fact that Nevada Democrats decided to go this route after consulting “a group of tech and security folks” whose names and affiliations were not provided. As previously mentioned, after the Iowa debacle, several media reports quoted technology and cybersecurity experts as well as software developers who had cited the rushed development of the Shadow Inc. app as having largely led to the app’s failure and the resulting chaos in Iowa.

It thus seems odd that a group of “tech and security folks” are urging Nevada Democrats to pay for the development of a new program in an even shorter time frame as a way to prevent Nevada’s caucus from repeating Iowa’s failures. Though the identity of this group remains unknown, concerns have been raised that some may have links to the 2020 presidential campaign of Pete Buttigieg, given that the Shadow Inc.-developed app used in Iowa was found to have ties to the Buttigieg campaign and the Iowa caucus chaos clearly benefited the Buttigieg campaign. Concerns about possible connections between these tech and security consultants and the Buttigieg campaign have only grown since it was revealed that Nevada Democrats recently hired an organizer for Pete Buttigieg’s 2020 presidential campaign, Emily Goldman, as the Caucus’ Voter Protection Director, just weeks before the caucus is set to take place.

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I felt a song coming on. From one of my favorite albums.

Executive Order (Kunstler)

In this pause between past and future Deep State seditions, and the full-blown advent of Corona Virus in every region of the world, we pause to consider Mr. Trump’s executive order requiring new federal buildings to be designed in the classical style. The directive has caused heads to explode in the cultural wing of Progressive Wokesterdom, since the worship of government power has replaced religion for them and federal buildings are their churches — the places from which encyclicals are hurled at the masses on such matters as who gets to think and say what, who gets to use which bathroom, and especially whose life and livelihood can be destroyed for being branded a heretic.

[..] A virtue of classicism is that it employs structural devices that allow buildings to stand up: arches, columns, colonnades. These are replicable in modules or bays along scales from small to large. These devices honestly express the tectonic sturdiness of a building within the realities of gravity. A hidden virtue of classicism is that it is based on the three-part representation of the human figure: the whole and all the parts within it exist in nested hierarchies of base-shaft-and-head. This is true of columns with capitols set on a base, of windows with their sills, sashes, and lintels, and the whole building from base to roof. Classical architecture follows proportioning systems universally found in nature, such as the Fibonacci series of ratios, which are seen in everything from the self-assembly of seashells to the growth of tree branches.

Thus, classicism links us to nature and to our own humanity. Classical ornaments — the swags, moldings, entablatures, cartouches, corbels, festoons, and what-have-you — are not mandatory, but, of course, they also provide a way of expressing our place in nature, which is a pathway to expressing truth and beauty.

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Just disband the thing alright. And defund Bellingcat.

Third Whistle-Blower Comes Forward To Corroborate Complaints About OPCW (RT)

A third whistle-blower has come forward to corroborate the previous complaints that the Organization for the Prohibition of Chemical Weapons (OPCW) tried to suppress evidence-gathering in the Douma probe, a report says. The alleged new whistleblower, whose redacted email was shared by the Grayzone Project on Tuesday, backed the complaints made by two former OPCW employees — South African engineer and organization’s veteran Ian Henderson, and another whistleblower known as ‘Alex.’ OPCW Director-General Fernando Arias had earlier dismissed the pair — dubbed Inspector A and Inspector B in the organization’s inquiry into their claims — as low-level rogue employees who conducted field work without proper authorization and which simply “could not accept that their views were not backed by evidence.”

However, the person, described by Grayzone as a former senior official with the OPCW, stood by Henderson and ‘Alex,’ writing that his time with the organization was “the most stressful and unpleasant” one in his life. “I feel ashamed for the Organization and I am glad I left it. “I fear those behind the crimes that have been perpetrated in the name of ‘humanity and democracy,’ they will not hesitate to do harm to me and my family,” the person wrote, explaining the decision to remain anonymous. Henderson was deployed with the fact-finding mission to Syria shortly after the alleged chemical attack in Douma. The inspector concluded that the cylinders, supposedly containing chlorine, were more likely manually placed on the ground rather than dropped from planes.

According to him, the higher-ups discarded his findings without explanation, and sidelined him from the rest of the mission. Its final report was later used by the US and some European countries to implicate the Syrian government of Bashar Assad in conducting the attack, which the Syrian authorities vehemently deny.

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What keeps America motoring.

Subprime Auto Loans, Serious Delinquencies Soar. These Are the Good Times (WS)

Auto loan and lease balances have surged to a new record of $1.33 trillion. Delinquencies of auto loans to borrowers with prime credit rates hover near historic lows. But subprime loans (borrowers with a credit score below 620) are exploding at a breath-taking rate, and they’re driving up the overall delinquency rates to Financial Crisis levels. Yet, these are the good times, and there is no employment crisis where millions of people have lost their jobs. All combined, prime and subprime auto-loan delinquencies that are 90 days or more past due – “serious” delinquencies – in the fourth quarter 2019, surged by 15.5% from a year ago to a breath-taking historic high of $66 billion, according to data from the New York Fed released today:

Loan delinquencies are a flow. Fresh delinquencies that hit lenders go into the 30-day basket, then a month later into the 60-day basket, and then into the 90-day basket, and as they move from one stage to the next, more delinquencies come in behind them. When the delinquency cannot be cured, lenders hire a company to repossess the vehicle. Finding the vehicle is generally a breeze with modern technology. The vehicle is then sold at auction, a fluid and routine process.[..] Seriously delinquent auto loans jumped to 4.94% of the $1.33 trillion in total loans and leases outstanding, above where the delinquency rate had been in Q3 2010 as the auto industry was collapsing, with GM and Chrysler already in bankruptcy, and with the worst unemployment crisis since the Great Depression approaching its peak. But this time, there is no unemployment crisis; these are the good times:

About 22% of the $1.33 trillion in auto loans outstanding are subprime, so about $293 billion are subprime. Of them, $68 billion are 90+ days delinquent. This means that about 23% of all subprime auto loans are seriously delinquent. Nearly a quarter!

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The biggest threat vs Trump’s re-election. Will the Dems weaponize it?

Job Openings Plunge the Most Since the Great Recession (WS)

The number of job openings in December dropped by 364,000 from November (seasonally adjusted), after having already plunged by 574,000 in November, according to the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS). This two-month plunge of 938,000 job openings came after a series of ups and downs with downward trend starting after the peak in January 2019. It brought the number of job openings in December to 6.42 million (seasonally adjusted), same level as in October 2017. Since the peak in January 2019, over 1.2 million job openings have dissolved into ambient air (November and December in red).

On a not-seasonally adjusted basis, job openings in December plunged by 14.9% from December 2018, the steepest since the Great Recession. In total, 1.05 million job openings have disappeared over the period. This was the seventh month in a row of year-over-year declines. Year-over-year comparisons eliminate seasonal fluctuations. And the fact that this year-over-year drop of 14.9% in December occurred in the not-seasonally adjusted data shows that the drop to 6.42 million job openings was not due to seasonal adjustments gone berserk. It was due to other reasons. There had been a minuscule dip into the negative in January 2013, and then the more visible dip into the negative in late 2016 and early 2017. What we’re seeing now is in an entirely different ballpark:

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I haven’t watched the entire video, but this is a topic that warrants much more scrutiny.

How Unfunded Pensions Will Destroy Your Retirement (Raoul Pal)

How can ordinary people behaving rationally create a generational threat? Raoul Pal, in his role as CEO and co-founder of Global Macro Investor, joins Real Vision to explain the interconnected problem of the everything bubble and the coming retirement crisis to answer the question, “why do we invest?” He explains in detail how the baby boomer generation, through the rational and reasonable behavior of seeking to live and retire comfortably, has fueled the creation of a massive financial bubble that touches nearly every corner of the economy as pensions take more and more risk. Pal breaks down the crucial demographic, economic, and political trends that have combined to create the problem and suggests potential solutions for Baby Boomers, Millennials, and Gen Xers to get out door before the fire of the coming recession. Filmed on February 4, 2020 in Grand Cayman.

Read more …

Now taking bets on when the term “sustainable” loses the last bit of its meaning. And no, electric cars don’t solve single problem. They create plenty new ones, though, so if problems are your thing…

Volkswagen and Daimler Push For More ‘Sustainable’ Chile Lithium (R.)

German automakers Volkswagen and Daimler have launched a study to push for more “sustainable” lithium mining in Chile, according to lobbyist filings reviewed by Reuters, a sign of growing supply chain concerns ahead of an expected electric vehicle boom. Chile’s Atacama salt flat is by far the biggest source of supply of the ultralight battery metal in South America’s so-called “lithium triangle.” The region, whose fragile ecosystem relies on a limited water supply, is home to the globe’s top two producers, U.S.-based Albemarle and Chile’s SQM. But concerns over sustainability have long plagued Atacama’s miners, which extract the metal from pools of brine beneath the world’s driest desert.

Residents and environmental groups worry about potential damage to a regional ecosystem home to an ancient indigenous culture, lagoons inhabited with rare flamingos and a booming tourism industry. Lobbying records show a team from German development agency GIZ and the public-private Fundacion Chile met with Cristóbal De La Maza, chief of top Chilean environmental regulator SMA, early this year to formally present plans for the “feasibility study.” “This project is driven by the Volkswagen and Daimler companies,” the filings read. “The growing importance of batteries has made the sustainability of lithium a key priority for these companies.”

Pressure is mounting on German carmakers to fast-track production of electric vehicles to meet increasingly stringent European Union anti-pollution rules. Volkswagen alone has staked its future on a $91 billion plan to profitably mass-producing zero-emission vehicles. That push has prompted beefed-up scrutiny of mining practices around key metals such as cobalt, copper and lithium, all of which are predicted to see a spike in demand in coming years. [..] Australia, the world’s No. 1 producer of the white metal, mines its lithium from hard rock, not brine.

Read more …

 

Joseph Shabalala died this week. He was the founder -and “father”- of Ladysmith Black Mambazo, the South African vocal group that accompanied Paul Simon on his Graceland album and tour.

 

 

 

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Nov 292019
 
 November 29, 2019  Posted by at 9:53 am Finance Tagged with: , , , , , , , ,  13 Responses »


Dorothea Lange Negro woman who has never been out of Mississippi July 1936

 

The Limits of Lagarde (Varoufakis)
Millennials Have a Right To Be Pissed at Boomers (Vice)
What’s Behind the Subprime Consumer Loan Implosion? (WS)
DOJ Watchdog Expected To Downgrade ‘Spying’ On Trump Campaign (ZH)
Papua New Guinea Faces Cash Crunch As China Repayment Schedule Ramps Up (R.)
Britain’s Chief Rabbi Mirvis Is Helping to Stoke Antisemitism (Cook)
Boris Johnson Replaced By Melting Ice Block In TV Debate (R.)
Greeks Are Last In Welfare Chart (K.)
‘There Is Only One Of Us Telling The Truth’ – Virginia Giuffre (Ind.)
Prince Andrew’s Ex Mulling Bombshell Tell-All Book (NYP)
How Prince Andrew Forced Me To Recognise The Hollowness Of The Crown (G.)

 

 

In my view this is far too close to “I was only following orders”. Draghi, Lagarde, Bernanke et al are responsible for their own actions.

The Limits of Lagarde (Varoufakis)

Shortly after the Eurogroup meeting of Eurozone finance ministers on June 27, 2015, I bumped into a worried-looking Mario Draghi, the president of the European Central Bank. “What on earth is Jeroen doing?” he asked me, referring to Jeroen Dijsselbloem, the Eurogroup’s then-president. “Damaging Europe, Mario. Damaging Europe,” I replied. He nodded, looking concerned. We took the elevator to the ground floor and parted silently. Journalists find it natural to assume that Draghi and I had a hostile relationship during the 2015 standoff between Greece, which I represented, and the ECB. But the impasse at which we had become stuck was not caused by a clash of characters, and it involved no mutual recrimination. Rather, it reflected an institutional failure for which I never held Draghi personally responsible. Hostility between us, being unnecessary, was absent.

My fleeting exchange with him came to mind as he recently vacated the electric chair amid much speculation about the ECB’s future direction under his successor, Christine Lagarde. It reminded me of the unacknowledged powerlessness of the ECB president, who leads a mighty institution that is far less independent in practice than it is in theory. Lagarde will now have to reckon with that powerlessness as she steers the ECB in a sea of deflationary hazards. During 2015, Draghi sometimes made decisions detrimental both to the Greek people and to Europe’s common interest. One came on February 4. On that morning, following a meeting I had in London the previous day with financiers to whom I presented my plans for a moderate debt restructuring, the Athens stock exchange index shot up by 13%, led by a gain of more than 20% for Greek bank shares.

With that wind in my sails, I flew to Frankfurt to meet Draghi for the first time. One might think that a freshly appointed eurozone finance minister who had just managed to boost his country’s financial assets significantly would be helped by his central banker. Instead, the ECB’s governing board decided the same day to sever Greek banks’ access to euro liquidity. Unsurprisingly, Greek corporate and banking shares crashed, wiping out the previous day’s gains. In any other country, the position of the central banker would be untenable. The remit of a central bank is to aid the government’s efforts to stabilize finance and support the economy. In the eurozone, however, political constraints force the central bank to inflict the kind of damage Draghi’s ECB visited upon our stock exchange that February afternoon.

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And they will have a lot more right soon.

Millennials Have a Right To Be Pissed at Boomers (Vice)

Just how badly are millennials being screwed out of wealth? Let’s take a look at the data. The Federal Reserve regularly publishes data on the generational gaps in wealth. The boomers have plenty of it, and millennials don’t. That’s no surprise — the boomers are older. But what recent data also clearly shows is that when the boomers were millennials’ age, they had significantly more than millennials do today. Back in 1989, when boomers were between 25 and 43, they already owned 20.9% of the country’s wealth, according to data from the Federal Reserve updated earlier this month. In 2019, millennials are between 23 and 38, and they currently own a whopping 3.2% of wealth. That means boomers had more than six times as much wealth in 1989 as millennials do now.


“I definitely think millennials have a bunch to be uniquely annoyed about,” said Josh Bivens, research director at the Economic Policy Institute. “Lots of them graduated into a horrible labor market, and they’ve probably been very stunted in their ability to get on the treadmill of earning enough to actually save anything.” Looking at wealth over time, any given generation would start out with nothing. (Children don’t own stuff.) As time passes, they’d accumulate wealth, and, eventually, people die and tend to pass their wealth on as inheritance.

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“Back in 2016, the credit-card delinquency rate at these banks was in the 3% range. It has more than doubled in two years.”

What’s Behind the Subprime Consumer Loan Implosion? (WS)

OK, we’ve got a situation in subprime consumer loans. The delinquency rate on credit-card loan balances at the nearly 5,000 smaller commercial banks in the United States – this means all banks except the largest 100 – is blowing out, according to Federal Reserve data. In the third quarter, the delinquency rate at these banks rose to 6.25%. That’s higher even than during the peak of the Financial Crisis. Back in 2016, the credit-card delinquency rate at these banks was in the 3% range. It has more than doubled in two years. Credit card balances are considered delinquent when they’re 30 days or more past due. This delinquency rate means that out of the banks total credit card balances, 6.25% are 30 days or more past due. This is a disturbingly large rate.


But delinquencies are a flow. Balances are removed from the delinquency basket either when the customer cures the delinquency, such as catching up with past-due payments, or when the bank “charges off” the delinquent balance against its loan loss reserves. But as these delinquent balances were taken out of the delinquency basket, even more new delinquencies fell into the basket, and the delinquency rate rose. Subprime auto loans have also been blowing out. In the third quarter, the serious delinquency rate of the $1.3 trillion in auto loans has risen to 4.71%, the highest since the worst months of the Financial Crisis, when the auto industry collapsed, and when the US was facing the worst unemployment crisis since the Great Depression. In the third quarter, about 21% of all subprime auto loans were seriously delinquent – meaning 90 days past due.

Read more …

The DOJ/Deep State protects its own?

DOJ Watchdog Expected To Downgrade ‘Spying’ On Trump Campaign (ZH)

In late September, RealClearInvestigations’ Paul Sperry suggested that Inspector General Michael Horowitz – tasked with investigating and exposing wrongdoing at the highest levels – was feared to be pulling punches in order to protect establishment darlings in his upcoming report on the Russia investigation. Now we learn that Horowitz, who volunteered on several Democratic political campaigns while in college and is married to a former liberal political activist, Obama donor and CNN employee, is expected to conclude that the FBI didn’t spy on the Trump campaign. Instead, when longtime FBI / CIA asset Stephan Halper and his undercover FBI ‘assistant’ named “Azra Turk” befriended George Papadopoulos, it was nothing more than “typical law enforcement activities,” according the New York Times.

“Mr. Horowitz found no evidence that Mr. Halper tried to infiltrate the Trump campaign itself, the people familiar with the draft report said, such as by seeking inside campaign information or a role in the organization. The F.B.I. also never directed him to do so, former officials said. Instead, Mr. Halper focused on eliciting information from Mr. Page and Mr. Papadopoulos about their ties to Russia. [..] Mr. Trump and his allies have pointed to some of the investigative steps the F.B.I. took as evidence of spying, though they were typical law enforcement activities. -NYT. Recall that the Obama administration had paid Halper over $1 million over a several years, with nearly half of it surrounding the 2016 election.

The report is also expected to conclude that Maltese professor Joseph Mifsud – who fed Papadopoulos the rumor that Russia had dirt on Hillary Clinton – is not an FBI informant. Mifsud, a self-described member of the Clinton Foundation, has been painted by Western media as a Russian asset. Except, nobody claimed Mifsud was an FBI informant. As The Conservative Treehouse notes, “The concern has always been Mifsud was a western intelligence asset, perhaps CIA.” Moreover, Horowitz will conclude that while the FBI was ‘careless and unprofessional’ in pursuing a wiretap on Trump campaign adviser Carter Page, and that a ‘front-line lawyer’ Kevin Clinesmith, 37, fabricated evidence to support a FISA spy warrant renewal against Page, that the underlying justification to go after Page remained intact.

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Belt and Road.

Papua New Guinea Faces Cash Crunch As China Repayment Schedule Ramps Up (R.)

Papua New Guinea’s annual debt repayments to China are forecast to increase 25% by 2023, new budget figures show, at the same time as the Pacific nation falls to its largest ever deficit. The resource-rich archipelago, which is at the center of a diplomatic tussle between China and the United States, has blamed extravagant spending by the previous administration for its souring finances, which will require the government to borrow even more to pay the bills. Balancing its books has been made more difficult by recalculations to the country’s outstanding debt. It has soared 10 percentage points since the last annual budget to 42% of GDP, above the legal limit of 35%.


“You have some of those loans clicking in; the repayments are going to be a problem,” said Paul Barker, executive director of Port Moresby-based think tank the Institute of National Affairs. Formerly administered by U.S. ally Australia, PNG has in recent years turned increasingly to China for financing as Beijing becomes a bigger player in the region. The U.S. has repeatedly warned that China was using “predatory economics” to destabilize the Indo-Pacific; a charge strongly denied by Beijing.

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Yup.

Britain’s Chief Rabbi Is Helping to Stoke Antisemitism (Cook)

Chief rabbi Ephraim Mirvis has not only misrepresented the known facts about Labour and its supposed antisemitism crisis. He has not only interfered in an overtly, politically partisan manner in the December 12 election campaign by suggesting that Jeremy Corbyn – against all evidence – is an antisemite. By speaking out as the voice of British Jews – a false claim he has allowed the UK media to promote – his unprecedented meddling in the election of Britain’s next leader has actually made the wider Jewish community in the UK much less safe. Mirvis is contributing to the very antisemitism he says he wants to eradicate. Mirvis’ intervention in the election campaign makes sense only if he believes in one of two highly improbable scenarios.

The first requires several demonstrably untrue things to be true. It needs for Corbyn to be a proven antisemite – and not just of the variety that occasionally or accidentally lets slip an antisemitic trope or is susceptible to the unthinking prejudice most of us occasionally display, including (as we shall see) Rabbi Mirvis. No, for Mirvis to have interfered in the election campaign he would need to believe that Corbyn intends actively as prime minister to inflame a wider antisemitism in British society or implement policies designed to harm the Jewish community. And in addition, the chief rabbi would have to believe that Corbyn presides over a Labour party that will willingly indulge race-hate speeches or stand by impassively as Corbyn carries out racist policies.

If Mirvis really believes any of that, I have a bridge to sell him. Corbyn has spent his entire political career as an anti-racism campaigner, and his anti-racism activism as a backbencher was especially prominent inside a party that itself has traditionally taken the political lead in tackling racism. The second possibility is that Mirvis doesn’t really believe that Corbyn is a Goebbels in the making. But if that is so, then his decision to intercede in the election campaign to influence British voters must be based on an equally fanciful notion: that there is no significant threat posed by antisemitism from the right or the rapidly emerging far right. Because if antisemitism is not an issue on the right – the same nationalistic right that has persecuted Jews throughout modern history, culminating in the Nazi atrocities – then Mirvis may feel he can risk playing politics in the name of the Jewish community without serious consequence.

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I thought it was funny. But Boris threatens to take Channel 4’s licence away.

Boris Johnson Replaced By Melting Ice Block In TV Debate (R.)

British broadcaster Channel 4 represented Prime Minister Boris Johnson with a block of melting ice in a prime-time election debate on the environment on Thursday, prompting his Conservative Party to complain this broke impartiality rules. The commercially funded public-service broadcaster invited leaders of all Britain’s main political parties to take part in the debate before Dec. 12’s election, but both Johnson and the leader of the Brexit Party, Nigel Farage, declined to attend. The Conservative Party offered former environment minister Michael Gove as a substitute, but the broadcaster said the debate was only intended for party leaders, and that the other political parties would not agree to change the terms.


“This effectively seeks to deprive the Conservative Party of any representation and attendance,” the Conservatives wrote in a letter of complaint to broadcast regulator Ofcom. British television broadcasters are required to be politically impartial, and face extra balance requirements during election periods. Ofcom can fine broadcasters that do not comply, and as a last resort can cancel a broadcaster’s license. The Conservatives said Thursday’s disagreement was “part of a wider pattern of bias by Channel 4 in recent months”. The broadcaster’s head of news and current affairs, Dorothy Byrne, described Johnson as “a known liar” in a major industry speech in August.

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“Six out of 10 Greeks have delayed paying at least one utility bill over the last 12 months..”

Greeks Are Last In Welfare Chart (K.)

Six out of 10 Greeks have delayed paying at least one utility bill over the last 12 months, and in seven out of 10 of those cases it’s not just a one-off incident but a regular occurrence. Some of those who eventually do pay their bills do so with borrowed money, mainly from friends, according to the findings of the European Consumer Payment Report 2019. The survey of 24,000 consumers in 24 European countries by Swedish company Intrum has brought to light a number of worrying trends on the European level, such as a return to excessive consumer borrowing, something that is spurred considerably by easy access to credit cards and loans obtained via the internet or the telephone, for example.


The report showed that 61 percent of Greeks had failed to pay at least one bill in the previous 12 months, which is the highest rate among the 24 countries surveyed and almost twice the European average of 33 percent. Worse, 68 percent of those who failed to pay on time said they did so regularly, also the highest rate in Europe, against an average rate of 47 percent. Furthermore, Greeks also had the highest rate (40 percent) of people who had borrowed money or maxed out their credit cards. The European average stands at just 24 percent, based on data from the 24 countries surveyed by Intrum.

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Three articles on Proice Andrew, just to indicate how much the pressure increases. Will The Firm give him up to save itself?

‘There Is Only One Of Us Telling The Truth’ – Virginia Giuffre (Ind.)

The woman who claims she was forced into sex with Prince Andrew as a teenager said in her first UK interview: “He knows what happened, I know what happened and there’s only one of us telling the truth.” Virginia Giuffre, previously known as Virginia Roberts, said being caught up with the Duke of York and Jeffrey Epstein was “a really scary time in my life”. The BBC‘s Panorama programme released a trailer on Twitter of its upcoming episode, which features an interview with Ms Giuffre, who claims she was made to sleep with Andrew when she was 17. The hour-long episode, titled The Prince and the Epstein Scandal, will be screened on BBC One on Monday.

Ms Giuffre alleges the duke had sex with her on three separate occasions. He denies the allegations and has insisted he has “no recollection of ever meeting this lady”. Ms Giuffre has also criticised the Metropolitan Police for failing to investigate her allegations. In a statement on Thursday, the Met said it stood by its decision not to investigate claims by the duke’s accuser, and added that officers had spoken to other law enforcement agencies but have “not received a formal request asking for assistance”. The Met said it reviewed its previous decision that it was “not the appropriate authority to conduct inquiries in these circumstances” following Epstein’s death in August, and that its position remained unchanged.

Epstein took his own life in a New York prison while he was being held on sex trafficking charges. William Barr, the US attorney general, has slapped down conspiracy theories claiming the trafficker was murdered, saying that he died in a “perfect storm of screw-ups”.

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Publishers can’t not look at this, it’s too lucrative.

Prince Andrew’s Ex Mulling Bombshell Tell-All Book (NYP)

Prince Andrew’s socialite ex is considering penning an explosive tell-all book — including details of a dinner party with Jeffrey Epstein attended by both Bill Clinton and Donald Trump, it was claimed Thursday. Lady Victoria Hervey, 43, has already been doing interviews discussing her brief fling with the Duke of York and how it threw her into the heart of Epstein’s depraved world. She says she was introduced to the pedophile by his accused madam Ghislaine Maxwell — who she likened to a James Bond character — and feels she only escaped Epstein’s clutches because she was “too old.” But Hervey kept back many of the juiciest details, which she now could put in an explosive book that could further embarrass the disgraced duke, according to The Sun.


“There is a lot that she has never revealed about the Royal family, members of high society and big-named stars,” a source close to her told the paper. “She’s done many interviews but has always kept many things under her belt. “She feels like now is the right time to get some things off her chest — including about Prince Andrew, Jeffrey Epstein and Ghislaine Maxwell. “She’d been a part of that social scene for many years.” Hervey’s “really explosive life” also includes “debauched drug-fueled parties, threesomes with celebrities — all sorts,” the source told The Sun of her book plans. “She has had a lucrative offer to write a book and she’s definitely considering it,” the source said.

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G-d only knows why anyone would want to watch this sort of thing, but now the royal family is forever linked to pedophilia.

How Prince Andrew Forced Me To Recognise The Hollowness Of The Crown (G.)

Before the advent of The Crown – the Netflix show, not the institution – Princess Margaret was widely regarded as a snobbish, spiteful creature. That image has been refurbished: to fans of the show, she is firmly established as poor Margaret, the dazzling, tragic second fiddle to the Queen, who only wanted a meaningful role. After two seasons, I had been thinking of Margaret this way myself, while gussying up uncharacteristically warm feelings for the royals. The Queen does a good job, I thought. So what if she’s a little dull, isn’t that the bedrock of service – dependability? It’s not often one has one’s delusions dismantled in real time, but so it has been, this past fortnight, witnessing Prince Andrew’s flagrant awfulness in tandem with The Crown’s terrible third season. The experience has been like a sudden, dramatic return to reason.

There was never a subversive element to The Crown, and nor was there need for one. As we know from the small amount of documentary footage that exists of the Queen in her off-hours, the most outlandish drama one can eke from the royals lies in the depiction of them doing “ordinary” things: watching TV, smiling. This drama only works if one is willing to be charmed, a feat that the early seasons achieved. They also adhered to the narrative put forward by the House of Windsor itself: however misguided its application, the animating principle of all royals – with the exception of Edward VIII – was duty, honour, loyalty. If the royals have a fault, the show suggests, it is that they take these principles too seriously, particularly when they come into conflict with more human considerations.

In Prince Andrew’s catastrophic TV interview, the precise, delusional nature of his language – his now infamous line, “my judgment was probably coloured by my tendency to be too honourable” – mirrored so exactly the ethos of the show, it could have served as its tag line. One can only imagine how the script, in its current form, would treat Andrew’s predicament: as the story of a prince crushed by the weight of his own nobility; the tragedy of a man whose saucy impulses had nowhere to go.

Read more …

 

 

 

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Nov 142019
 


Pablo Picasso Pitcher of flowers on a table 1942

 

The Impeachment Pantomime (Patrick Lawrence)
The Real Ukraine Controversy: An Activist US Embassy (Solomon)
Trump Impeachment Inquiry: New Claims Amid Public Hearing (BBC)
Trickster Adam Schiff Conjuring ‘Guilt’ Out Of Thin Air (NYPost)
Trump Impeachment Is Blueprint To Overthrow Government From Within (Rives)
Here Are The Payments To Hunter Biden, Leaked From Ukraine (CDMedia)
Lawmaker Posts Cryptic Jeffrey Epstein Message During Impeachment Hearing (G.)
The Holy-Cow Moment for Subprime Auto Loans (WS)
Le Mesurier Gets Cross (Craig Murray)
Greek Refugee Camp For 640 People Is Found To Be Housing 3,745 (G.)

 

 

I have too much to say about the impeachment thing to do it here, I’ll do that separately later. Meanwhile, a few strong commentaries:

The Impeachment Pantomime (Patrick Lawrence)

The impeachment probe starts to take on a certain reek. It starts to look as if contempt for Trump takes precedence over democratic process — a dangerous priority. Sperry quotes Fred Fleitz, a former National Security Council official, thus: “Everyone knows who he is. CNN knows. The Washington Post knows. The New York Times knows. Congress knows. The White House knows…. They’re hiding him because of his political bias.” Here we come to another question. If everyone knows the whistleblower’s identity, why have the corporate media declined to name him? There can be but one answer to this question: If Ciaramella’s identity were publicized and his professional record exposed, the Ukrainegate narrative would instantly collapse into a second-rate vaudeville act — farce by any other name, although “hoax” might do, even if Trump has made the term his own.


There is another half to this burlesque. While Schiff and his House colleagues chicken-scratch for something, anything that may justify a formal impeachment, a clear, documented record emerges of Joe Biden’s official interventions in Ukraine in behalf of Burisma Holdings, the gas company that named Hunter Biden to its board in March 2014 — a month, it is worth noting, after the U.S.–cultivated coup in Kiev. There is no thought of scrutinizing Biden’s activities by way of an official inquiry. In its way, this, too, reflects upon the pantomime of the impeachment probe. Are there sufficient grounds to open an investigation? Emphatically there are. Two reports published last week make this plain by any reasonable measure.

Read more …

Nobody appears to know more about the Ukraine boondoggle than John Solomon. But the Hill seems to have dumped him. He publishes on his own site now.

The Real Ukraine Controversy: An Activist US Embassy (Solomon)

The first time I ever heard the name of U.S. ambassador to Ukraine Marie Yovanovitch was in early March of this year. It did not come from a Ukrainian or an ally of President Trump. It came from a career diplomat I was interviewing on background on a different story. The diplomat, as I recall, suggested that Yovanovitch had just caused a commotion in Ukraine a few weeks before that country’s presidential election by calling for the firing of one of the prosecutors aligned with the incumbent president. The diplomat related that a more senior State official, David Hale, was about to travel to Ukraine and was prepping to be confronted about Yovanovitch’s comments. I remember the diplomat joking something to the effect of, “we always say that the Geneva Convention is optional for our Kiev staff.”

The Geneva Convention is the UN-backed pact enacted during the Cold War that governs the conduct of foreign diplomats in host countries and protects them against retribution. But it strictly mandates that foreign diplomats “have a duty not to interfere in the internal affairs of that State” that hosts them. You can read the convention’s rules here. I dutifully checked out my source’s story. And sure as day, Yovanovitch did give a speech on March 5, 2019 calling for Ukraine’s special anticorruption prosecutor to be removed. You can read that here. And the Ukraine media was abuzz that she had done so. And yes, Under Secretary of State Hale, got peppered with questions upon arriving in Kiev, specifically about whether Yovanovitch’s comments violated the international rule that foreign diplomats avoid becoming involved in the internal affairs and elections of their host country.

Hale dutifully defended Yovanovitch with these careful words. “Well, Ambassador Yovanovitch represents the President of the United States here in Ukraine, and America stands behind her statements. And I don’t see any value in my own elaboration on what they may or may not have meant. They meant what she said.” You can read his comments here. Up to that point, I had focused months of reporting on Ukraine on the U.S. government’s relationship with a Ukraine nonprofit called the AntiCorruption Action Centre, which was jointly funded by liberal megadonor George Soros’ charity and the State Department. I even sent a list of questions to that nonprofit all the way back in October 2018. It never answered.

Given that Soros spent millions trying to elect Hillary Clinton and defeat Donald Trump in 2016, I thought it was a legitimate public policy question to ask whether a State Department that is supposed to be politically neutral should be in joint business with a partisan figure’s nonprofit entity.

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The one thing that was new in yesterday’s circus was Bill Taylor claiming more third-hand stories.

Trump Impeachment Inquiry: New Claims Amid Public Hearing (BBC)

A top US diplomat told impeachment hearings that President Trump directly asked about a Ukrainian investigation into his Democratic rival Joe Biden. In previously unheard testimony, Bill Taylor, the acting US ambassador to Ukraine, said a member of his staff was told Mr Trump was preoccupied with pushing for a probe into Mr Biden. He was speaking at the first public hearings in the impeachment inquiry. Mr Trump told reporters he did not recall making such comments. Mr Trump is accused of withholding US military aid to Ukraine in order to pressure the country’s new president to publicly announce a corruption inquiry into Mr Biden, among the favourites to take him on in the 2020 presidential race.


[..] During a detailed opening statement, Mr Taylor said a member of his staff had overheard a telephone call in which the president inquired about “the investigations” into Mr Biden. The call was with Gordon Sondland, the US ambassador to the European Union, who reportedly told the president over the phone from a restaurant in Kyiv that “the Ukrainians were ready to move forward”. After the call, the staff member “asked ambassador Sondland what President Trump thought about Ukraine”, Mr Taylor said. Mr Taylor said: “Ambassador Sondland responded that President Trump cares more about the investigations of Biden.” Meanwhile observers and former officials have drawn attention to the security implications of making the call from a restaurant, potentially exposing the conversation to eavesdropping by Russian intelligence.

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“Thanks to the false charges made by James Comey, John Brennan and others that Trump was a running dog for Vladimir Putin, uniforms and badges are no longer proof of rectitude. Count diminished public trust in those institutions as a lasting legacy of the Obama presidency.”

Trickster Adam Schiff Conjuring ‘Guilt’ Out Of Thin Air (NYPost)

The conclusion has always come first — get Trump — then create a justification by weaving a few thin threads together into a noose. In both cases, the Dems have relied on members of the resistance embedded in the government to serve as the hanging party. Some wear military uniforms while others are in the CIA and FBI. Thanks to the false charges made by James Comey, John Brennan and others that Trump was a running dog for Vladimir Putin, uniforms and badges are no longer proof of rectitude. Count diminished public trust in those institutions as a lasting legacy of the Obama presidency. The main problem now is that, three years after Trump’s election, these constant hair-on-fire screams sound and feel like partisan politics pretending to be apolitical.

The smell of a continuing dirty trick is hard to ignore. Schiff, of course, comes by his current role honestly in the sense that he has been a chief proponent of anything and everything that might turn the public against the president. He insisted that Trump was guilty of collusion for two years before Mueller said otherwise and then continued to say it despite Mueller. But after the special counsel’s public testimony turned out to be the dud of all duds, Russia, Russia, Russia dropped off the earth and Schiff instantly proclaimed Ukraine, Ukraine, Ukraine the new crime of the century. In a rational world, where facts matter and credibility counts, Schiff would already be consigned to history’s dustbin alongside Sen. Joe McCarthy.

Like the infamous red baiter who saw a commie behind every desk, Schiff sees evidence of “high crimes and misdemeanors” every time the president opens his mouth. It’s been that way since before Trump was inaugurated. McCarthy was not burdened by decency, as Army lawyer Joseph Welch famously noted. Schiff is similarly unburdened and so he, too, willy-nilly ruins lives and trashes reputations without a sense of guilt. Speaker Nancy Pelosi is no less culpable. In the early months after she got the gavel, she skillfully pushed back against the tide of radicalism sweeping through her party. Repeatedly, she insisted that impeachment was extremely divisive, should only be a last resort and had to have bipartisan support.

Those were her red lines, and she violated all of them. Her resolution for a formal inquiry got zero GOP votes and the public support for removing Trump is essentially limited to her party’s voters. There is no national emergency that would justify such an extreme action, and yet she gave Schiff the green light.

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Jenna Ellis Rives is a member of the Donald Trump 2020 advisory board. She is a constitutional law attorney.

Trump Impeachment Is Blueprint To Overthrow Government From Within (Rives)

The House is ready to begin public hearings this week, furthering the partisan move by the Democrats to impeach President Trump in a blatant abuse of constitutional authority. Representative Adam Schiff said in a press conference, “These open hearings will be an opportunity for the American people to evaluate the witnesses for themselves and also to learn firsthand about the facts of the president’s misconduct.” There are several problems with this statement. First, Schiff is already characterizing the outcome of the investigation. As the chairman of the House Intelligence Committee, he serves as a key arbiter of the inquiry under the resolution. As such, he is in a position that demands an unbiased irreproachable ethic in evaluating requests for subpoenas and testimony.

Any judge in a similar position would be required to recuse himself with even a hint of the pure bias Schiff has displayed, including coordination with the Ukraine whistleblower and other actions. The Democrats do not even pretend that their impeachment game is fair or actually about fact finding. This is simply about using a grant of power in the Constitution arbitrarily and politically, outside the bounds of due process and the purpose of that authority. Although the House does have the “sole power” of impeachment, that is a grant of jurisdiction, not a license to proceed on purely partisan motivation. Article One must work coordinately and not inconsistently with Article Two, which provides the legal basis upon which a sitting president may be impeached.

Second, Schiff demonstrates this is all about media play in the court of public opinion. Voters have no power or responsibility in an impeachment proceeding. The drafters of the Constitution intended the impeachment and removal process to be exercised only when there was sufficient evidence that the subject of the impeachment had committed a legally qualifying offense. This is not about whether impeachment is popular in the polls or whether a majority of Americans prefer it. Transparency in the context of this quasi judicial process is to provide fundamental fairness and due process for the president. Why are the Democrats so hellbent on blatantly refusing to allow Republican subpoenas and witnesses?

It is because it is a sham. Yet the Democrats are openly admitting that their goal is to try this in the media and attempt to dishonestly convince us that somehow we too should hate Donald Trump. They are hoping to convince us not to vote for him. That is not a legitimate or constitutional purpose of an impeachment. It is rather ironic that they claim his “crime” is an alleged quid pro quo to gain political advantage, while they are manipulating the power of impeachment for their political advantage. It is Schiff and other Democrats like House Speaker Nancy Pelosi who should be impeached. There is an actual constitutional basis for that.

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And the series keeps going on.

Here Are The Payments To Hunter Biden, Leaked From Ukraine (CDMedia)

The information below has been leaked from the Ukrainian General Prosecutor’s office and acquired from intelligence sources within Ukraine; it is part of investigative materials acquired during an investigation into Biden corruption. As CD Media has reported previously, the National Anti-Corruption Bureau Of Ukraine (NABU) has succeeded in shutting down all investigations into Hunter Biden, Joseph Biden, Burisma owner Mykola Zlochevskiy, former Ukrainian President Petro Poroshenko, and former Polish President Aleksander Kwasniewskiy. NABU is controlled by Obama/Soros linked operatives and was created to coverup Democrat, Biden, Deep State, State Department corruption during the Obama Administration and the years after in which this cabal went after duly-elected President Trump.

Prosecutors who desire the information to get out in spite of the Deep State’s efforts to prevent such a release and prevent investigations to continue, have leaked to CD Media. The highlighted sections describe: According to the Department of Financial Monitoring (Counter-intelligence) of Latvia, the following sums of money were obtained from Busima Holding Limited (Cyprus) to the account of Burisma Holding Limited (Cyprus) which is open at AS PrivatBank in Latvia: money transfer of 14 655 982 US Dollars and 366 015 EUR from the company “Wirelogic Technology AS”, and 1 9 64 375 US dollars from “Digitex Organization LLP” based on the credit agreements. (Note: credit agreements here mean “intra-company” transactions to decrease the taxes to be paid or “credit agreement” also serve as means of hidden dividend payments).


Further, the part of the sums described above, the money was transferred to Alan Apter (302 885 EUR), Alexander Kwasniewski (1 150 000 EUR), Devon Archer and Hunter Biden. Additional information was leaked: BURISMA HOLDINGS LIMITED during a period from 18th November 2014 to 16th November 2015 transacted 45 money transfers through MORGAN STANLEY SMITH BARNEY LLC in the sum of 3.5 mln US Dollars. The recipient of the money transfer is the company Rosemont Seneca Bohai LLC (belongs to Devon Archer). Note: The company belongs to Devon Archer and Kerry Family including Kerry Senior, Kerry Junior, Heinz Jr and Hunter Biden. Devon Archer, Kerry Jr, Heinz Jr and Hunter Biden are listed as partners in Rosement Seneca Fund, Rosemont Seneca Partners and affiliated Rosemont Seneca other companies.

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“EPSTEIN DIDN’T KILL HIMSELF”

Lawmaker Posts Cryptic Jeffrey Epstein Message During Impeachment Hearing (G.)

Conspiracy theories have abounded ever since Jeffrey Epstein’s death in a New York jail was ruled a suicide, with figures on the right and left claiming he was murdered. On Wednesday, a US congressman weighed in with his own cryptic message. Republican Paul Gosar, a staunch conservative from Arizona, issued a series of 23 tweets over a roughly eight-hour period railing against the Democrats’ impeachment investigation of Donald Trump. Taken together, the first letter of each tweet spells: “EPSTEIN DIDN’T KILL HIMSELF”. As the first public impeachment hearing got under way, it was unclear what prompted the timing of Gosar’s message. Asked whether it was intentional, his communications director, Ben Goldey, replied with an equally cryptic comment:

All of the tweets pertained to testimony from today’s hearing.

Rest assured, they are substantive.

Every one of them.

All of them.

5 were brilliant.

1 was ok.

Zealous Twitter users picked up on the original message, which was easy to miss as it was couched in standard-issue rightwing complaints: “No quid pro quo”, “Democrats are desperate”, “Hillary Clinton and the DNC funded a foreign spy”. A few hours later, however, Gosar’s account posted Goldey’s comment with the first letter of each line bolded, making the message clear.

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Yeah, Jay Powell, very strong economy.

The Holy-Cow Moment for Subprime Auto Loans (WS)

Serious auto-loan delinquencies – auto loans that are 90 days or more past due – in the third quarter of 2019, after an amazing trajectory, reached a historic high of $62 billion, according to data from the New York Fed today. This $62 billion of seriously delinquent loan balances are what auto lenders, particularly those that specialize in subprime auto loans, such as Santander Consumer USA, Credit Acceptance Corporation, and many smaller specialized lenders are now trying to deal with. If they cannot cure the delinquency, they’re hiring specialized companies that repossess the vehicles to be sold at auction. The difference between the loan balance and the proceeds from the auction, plus the costs involved, are what a lender loses on the deal.

The repo business, however, is booming. But delinquencies are a flow: As current delinquencies are hitting the lenders’ balance sheet and income statement, the flow continues and more loans are becoming delinquent. And lenders are still making new loans to risky customers and a portion of those loans will become delinquent too. And now the flow of delinquent loans is increasing – and this isn’t going to stop anytime soon: These loans are out there and new one are being added to them, and a portion of them will be defaulting. Total outstanding balances of auto loans and leases in Q3, according to the New York Fed’s measure (higher and more inclusive than the Federal Reserve Board of Governors’ consumer credit data) rose to $1.32 trillion:

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Upon the death of White Helmets co-founder James Le Mesurier, Murray lists some 20 UK journalists who all follow the Twitter account of “Philip Cross”, which has only ever retweeted things without posting one original tweet. “Philip Cross”, though, has changed Wikipedia pages for 2,987 consecutive days, and made dozenns of changes to Le Mesurier’s page in the 24 hours after his death.

Le Mesurier Gets Cross (Craig Murray)

This week, on the day of Le Mesurier’s death, “Philip Cross” made 48 edits to Le Mesurier’s Wikipedia page, each one designed to expunge any criticism of the role of the White Helmets in Syria or reference to their close relationship with the jihadists. “Philip Cross” has been an operation on a massive scale to alter the balance of Wikipedia by hundreds of thousands of edits to the entries, primarily of politically engaged figures, always to the detriment of anti-war figures and to the credit of neo-con figures. An otherwise entirely obscure but real individual named Philip Cross has been identified who fronts the operation, and reputedly suffers from Aspergers. I however do not believe that any individual can truly have edited Wikpedia articles from a right wing perspective, full time every single day for five years without one day off, not even a Christmas, for 2,987 consecutive days.


I should declare here the personal interest that “Philip Cross” has made over 120 edits to my own Wikipedia entry, including among other things calling my wife a stripper, and deleting the facts that I turned down three honours from the Crown and was eventually cleared on all disciplinary charges by the FCO. I hazard the guess that at least several of the above journalists follow “Philip Cross” on twitter because they are a part of the massive Wikipedia skewing operation operating behind the name of “Philip Cross”. If anybody has any better explanation of why they all follow “Philip Cross” on twitter I am more than willing to hear it.

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“Nine unaccompanied girls were sleeping on the floor in a 10 metre sq container next to the police office, with no bathroom or shower.”

Greek Refugee Camp For 640 People Is Found To Be Housing 3,745 (G.)

An EU-funded refugee camp on the Greek island of Samos built to house 640 people is home to 3,745, with unaccompanied children forced to sleep on the floor of windowless and overcrowded containers, an official audit has revealed. Other children were found to be living in makeshift tents or in derelict buildings on the outskirts of the camp in what the special report from the European court of auditors described as “dire conditions”. “Seventy-eight unaccompanied minors were in tents or abandoned derelict houses outside the hot spot, in unofficial extensions to the facility,” the auditors said. “Nine unaccompanied girls were sleeping on the floor in a 10 metre sq container next to the police office, with no bathroom or shower.”


The situation at Greek facilities on Samos and at the island of Lesbos are described as “highly critical in terms of capacity and the situation of unaccompanied minors”, due to a failure of the bloc’s relocation and return scheme for migrants coming to Europe from countries such as Syria. The auditors’ findings were echoed on Wednesday in appeals made by the mayor of Samos, Georgios Stantzos, who warned of riots due to the “primitive” conditions. Last month, a fire broke out in the camp after a brawl in town between rival groups of Syrians and Afghans.

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Apr 152018
 
 April 15, 2018  Posted by at 9:50 am Finance Tagged with: , , , , , , , , , ,  19 Responses »


 

Russia Claims OPCW Manipulated Skripal Findings (AFP)
To Opt Out Of Facebook’s Tracking, I’m Going To Have To Join Facebook (Wired)
Tesla Is The Worst Car Manufacturer In The Developed World (F.)
New Lawsuit Alleges Musk Knowingly Lied About Model 3 Production (ZH)
Subprime Stages Comeback As ‘Non-Prime’ (CNBC)
247,977 Stories In The Vacant City (NYDN)
Judge Rules Exxon Can’t Stop Probe Into Whether They Lied For Decades (Ind.)
World May Hit 2ºC Warming in 10-15 Years Thanks to Fracking (NC)
‘There Is No Such Thing As Past Or Future’ (G.)
Time is Elastic (Rovelli)

 

 

Curiouser. You’d think Russia doesn’t just make up an entire Swiss lab.

Russia Claims OPCW Manipulated Skripal Findings (AFP)

Moscow on Saturday accused the chemical weapons watchdog of manipulating the results of its investigation into the poisoning of a former Russian spy, saying his samples had traces of a nerve agent used by the west. Britain says former double agent Sergei Skripal and his daughter Yulia were last month targeted with a nerve agent of the novichok family, which was developed in the Soviet Union. The attack shredded ties between Russia and Britain and led to a crisis in relations between Moscow and the west including a huge wave of tit-for-tat diplomatic expulsions. The Organisation for the Prohibition of Chemical Weapons has said it confirmed “the findings of the United Kingdom relating to the identity of the toxic chemical” without naming the substance involved.

On Saturday, Russia’s foreign minister, Sergei Lavrov, claimed the UN-linked Organisation for the Prohibition of Chemical Weapons (OPCW) had sent the Skripals’ biomedical samples to Swiss experts who found they contained traces of the nerve agent BZ, used by the west. “According to the results of the examination, the samples had traces of toxic chemical BZ and its precursors,” Lavrov said, citing what he said was “confidential information”. “Russia and the USSR never developed such chemical substances,” he said. “In this regard we are asking the OPCW why the information which reflected the conclusions of specialists from the Spiez laboratory was completely omitted from the final document.”

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Not a discussion we should leave up to Facebook. Or Congress.

To Opt Out Of Facebook’s Tracking, I’m Going To Have To Join Facebook (Wired)

Now I know what you’re thinking. What kind of person has never been on Facebook? I’d like to tell you it was all about privacy, but the truth is, I just had a bad feeling about it. You see, I went to Cambridge, so I was one of the first to get the chance to join what you insist on calling your “community.” And almost instantly, it was clear that it turned people into wankers. (Bigger wankers. This was Cambridge, after all.) If I remember correctly, in the early days everyone was desperate to have a higher friend count. Then it was obsessive tagging in photos. Yes, even in its earliest days, your system brought out the worst in people.

It’s not easy, not being on Facebook. At first, it was the parties. At a certain point, people stopped sending email invites. They just assumed you were on Facebook – and, if you weren’t, you didn’t find out. I’m 35 now, so I don’t get invited to parties, unless they’re for small children. Instead, I miss out on work, because I can’t contact people or share my articles. When you finally make journalism pivot to Facebook Groups, I’ll be completely screwed. I considered joining many times. But every time I aired the thought, I got the same reaction: “Don’t! It’s the worst!” I wasn’t sure if I remembered this correctly, so I called a few people to check. All agreed: they hate your service, but they have to use it, because everyone else does. (One person objected. She works in your London office.)

Every other social network, even Twitter, has a core of fans that genuinely wish it well. You’re the sole exception. Then I got into tech, and privacy, and data protection, and I learned that you were throttling internet freedoms in developing countries, and letting random strangers see your users’ most intimate details, so I started becoming one of those paranoid people who uses a VPN all the time, and puts a scrap of torn-off Post-It note on their laptop camera. Just like you! But you probably knew all this about me anyway. Which brings me back to my question. In your testimony to Congress, you said: “Anyone can turn off or opt out of any data collection for ads, whether they use our services or not.”

But, as you should know, while that’s possible for someone on Facebook, for me, a non-Facebook user, it’s not. Your illegal trackers follow me across 30 per cent of the internet, building a “shadow profile” you store in a nonanonymised format in your “Hive” analysis database. You claim to do it “for security purposes” (let me tell you, if Facebook’s security requires you to surveil the world’s population, then you have made a desert and called it peace). But reporters – and people who used to work in your advertising team – say the information is collected to improve the friend suggestions you’ll give me in case I do ever sign up. It’s one more growth hack on a whole site of them.

What can I do to stop you? I’ve installed tracker blockers on my browser, but, since you killed the media business, a lot of my favourite sites make me disable them. And your trackers work in the apps on my phone. Unless I go full tin-foil hat (and it’s tempting), you’ve basically left me with one option. To opt out of Facebook’s tracking, I’m going to have to join Facebook. So yeah: fuck you. Because, of course, this is exactly your plan. Forcing people onto Facebook is what you’re all about.

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“..that is a terrible way to produce a consumer product, and a terrible way to generate returns for shareholders.”

Tesla Is The Worst Car Manufacturer In The Developed World (F.)

I visited my first auto plant in 1992, and have been fortunate enough to visit plants in most countries where cars are made. I have seen workers sleeping under half-finished bodies in Brazil, seen employees trying to make doors fit by using rubber hammers at a now-closed Ford facility in New Jersey and, noted, that, yes, they do have beer in the vending machines at many German auto factories. To see a rack of die castings sitting outside exposed to the weather at a facility that is, according to Google Maps, 10.7 miles away from the actual Tesla assembly facility in Fremont is just mind-boggling. Tesla is the worst car manufacturer in the developed world. Bar none. Note that I didn’t write “designer” or “marketer,” but manufacturer.

Musk had zero auto industry experience when founding Tesla and CTO J.T. Straubel—who according to Tesla’s 10-K filing personally holds Tesla’s important patents—developed a love for electric vehicles by rebuilding golf carts. It’s just astounding to me that the markets are affording a $50 billion valuation to a company that can’t perform the most basic task for which it was incorporated. Famed VW purchasing chief José Ignacio López de Arriortúa famously walked into a plant and repeatedly pointed at boxes of yet-to-be-used parts and yelled the word “capital.” When capital is tied up in byzantine manufacturing processes that stunts the development of cash flow. It’s all connected. This is why Tesla has such dire cash flow problems.

This is why I believe—sorry, Elon—Tesla is going to have to issue equity this year. My favorite automotive mantra is “quality is designed in.” That’s the most damning piece of information in the CNBC article, actually, more damning than the pictures of parts racks. Here is the quote: “Current and former employees from the company’s Fremont, Calif. and Sparks, Nevada factories blame Tesla for spending less time to vet suppliers than is typical in auto manufacturing. These people said the company failed to comprehensively test “variance specs” with some vendors before embarking on Model 3 production.”

Tesla has cut corners in building up to current production, and published reports this week indicated Tesla was alerting suppliers of an incredibly fast 19-month design-to-job one timetable on the upcoming Model Y crossover. So, it would seem corner-cutting is continuing, and that is a terrible way to produce a consumer product, and a terrible way to generate returns for shareholders.

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He better hope he wins this one.

New Lawsuit Alleges Musk Knowingly Lied About Model 3 Production (ZH)

A new securities class action lawsuit filed in late March 2018, which names Elon Musk as a defendant, alleges that the Tesla CEO knew that the Model 3 was not going to be able to be produced as the rates he claimed – and that the company was not going to be able to meet production goals due to – get this – the production lines not even being assembled. The lawsuit alleges that this didn’t prevent Elon Musk from going out and telling the investing public otherwise, hence the allegation of securities fraud. First, the allegation that Musk was told by his own employees that the Model 3 couldn’t be mass produced by the end of 2017, which was the company’s stated goal.

Then, after claiming in May 2017 that the company was “on track” to meet its mass production goal, it’s alleged the company hadn’t even finished building its production lines, clearly meaning it wasn’t “on track”. The lawsuit alleges that Musk knew the line was “way behind”. The suit alleges that the company was building Model 3’s by hand at a “pilot shop” at the same time Tesla claimed to be on track for “mass production”; it also claims that it was “evident to anyone who visited the facility” – including Elon Musk – that the line wasn’t built and that “construction workers were spending most of their shifts sitting around with nothing to do”. We also read in the lawsuit that Tesla’s Gigafactory, at the time in question, was allegedly capable of producing only one battery pack per day – and that the production of one battery pack took “two shifts” to complete.

The suit alleges that the company’s former CFO, Jason Wheeler – who is one of more than 50 key executives and VPs to have left the company over the last half decade or so – told Elon Musk personally that they wouldn’t be able to mass produce by the end of 2017. The entire lawsuit is available at this link and some of the most interesting content was first shared by critics of the company on Twitter. The drumbeat of accountability for Elon Musk continues to pound louder and louder as each day progresses, with some analysts calling for the SEC to investigate him if the company doesn’t meet its stated cash flow positive and “no capital raise” guidance for the back end of 2018.

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Got to find the last sucker.

Subprime Stages Comeback As ‘Non-Prime’ (CNBC)

They were blamed for the biggest financial disaster in a century. Subprime mortgages – home loans to borrowers with sketchy credit who put little to no skin in the game. Following the epic housing crash, they disappeared, due to strong, new regulation, and zero demand from investors who were badly burned. Barely a decade later, they’re coming back with a new name — nonprime — and, so far, some new standards. California-based Carrington Mortgage Services, a midsized lender, just announced an expansion into the space, offering loans to borrowers, “with less-than-perfect credit.” Carrington will originate and service the loans, but it will also securitize them for sale to investors.

“We believe there is actually a market today in the secondary market for people who want to buy nonprime loans that have been properly underwritten,” said Rick Sharga, executive vice president of Carrington Mortgage Holdings. “We’re not going back to the bad old days of ninja lending, when people with no jobs, no income, and no assets were getting loans.” Sharga said Carrington will manually underwrite each loan, assessing the individual risks. But it will allow its borrowers to have FICO credit scores as low as 500. The current average for agency-backed mortgages is in the mid-700s. Borrowers can take out loans of up to $1.5 million on single-family homes, townhomes and condominiums.

They can also do cash-out refinances, where borrowers tap extra equity in their homes, up to $500,000. Recent credit events, like a foreclosure, bankruptcy or a history of late payments are acceptable. All loans, however, will not be the same for all borrowers. If a borrower is higher risk, a higher down payment will be required, and the interest rate will likely be higher. “What we’re talking about is underwriting that goes back to common sense sort of practices. If you have risk, you offset risk somewhere else,” added Sharga, while touting, “We probably are going to have the widest range of products for people with challenging credit in the marketplace.”

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It’s not about people, it’s about money. Fundamental flaw.

247,977 Stories In The Vacant City (NYDN)

There’s a hidden city in the five boroughs. Though its permanent population is zero, it is growing faster than any other neighborhood. Early numbers from the Census Bureau’s Housing and Vacancy Survey show the unoccupied city has ballooned by 65,406 apartments since 2014, an astonishing 35% jump in size in the three years since the last survey. Today, 247,977 units — equivalent to more than 11% of all rental apartments in New York City — sit either empty or scarcely occupied, even as many New Yorkers struggle to find an apartment they can afford. The Vacant City — let’s call it that, with a tip of the hat to the 1948 movie and old TV series “Naked City” — has tripled in 30 years.

A generation ago, there were just 72,051 apartments in the Vacant City. Back in 1987, when rents were cheap by today’s standards at a median $395 a month, the Vacant City made up less than 4% of rental apartments. Today, the median rent is $1,450, having risen twice as fast as inflation, even while the Vacant City tripled in size. The numbers just don’t add up the way conventional wisdom said they should. For years, development officials, the real estate industry and think tanks have told us that artificially low rents are holding the city back. Higher rents, the argument went, would free landlords to make a reasonable amount of money and serve as an incentive to increase the housing supply.

The new Census gleanings finally put the lie to that reasoning. We have higher prices for sure — but the only part of the city’s residential real estate that has grown is the Vacant City. More apartments are being held off the market than ever. Some remain vacant for legitimate reasons. Almost 28,000 of those unused units have been rented or sold but not yet occupied, or are awaiting a sale. Almost 80,000 are getting renovated, 9,600 tied up in court, and 12,700 vacant because the owner is ill or elderly or simply can’t be bothered. But that still leaves more than 100,000 units — 74,945 occupied temporarily or seasonally, and 27,009 held off the market for unexplained reasons.

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Shell, Exxon, they’ve all known all along. But they have lots of power.

Judge Rules Exxon Can’t Stop Probe Into Whether They Lied For Decades (Ind.)

A Massachusetts judge has ruled that ExxonMobil cannot stop a probe into whether the oil giant misled shareholders for decades about the dangers of climate change and its impact on their business. The judge, in a Friday ruling, found that Massachusetts Attorney General Maura Healey has grounds to pursue its civil investigation into the matter even though Exxon is not technically an in-resident corporation. The judgement follows after a federal judge in New York dismissed a similar lawsuit aimed at ending the climate change probe late last month. In that lawsuit, Exxon argued that Ms Healey and her New York counterpart, Eric Schneiderman, were pursuing their climate probes in bad faith. The judge dismissed the argument as “implausible”.

“For the second time this month, Exxon’s scorched earth campaign to block our investigation has been entirely rejected by the courts. In its decision today, our state’s highest court affirmed that Exxon is subject to our laws, and that our office has authority to investigate,” Ms Healey said in a statement following the decision. “Now Exxon must come forward with the truth, what it knew about climate change, when, and what it told the world. The people of Massachusetts — and people everywhere — deserve answers.” New York and Massachusetts first began their climate change probes after news reports in 2015 found that Exxon had known for years that reducing greenhouse gas emissions is necessary to combat climate change impacts, but did not reveal those concerns to shareholders or the public.

Exxon has denied that their public policies were in any way inconsistent with what their scientists’ findings that climate change poses a serious risk to its business and to the environment.

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It’s used to be 2100. Now it’s 2030.

World May Hit 2ºC Warming in 10-15 Years Thanks to Fracking (NC)

In 2011, a Cornell University research team first made the groundbreaking discovery that leaking methane from the shale gas fracking boom could make burning fracked gas worse for the climate than coal. In a sobering lecture released this month, a member of that team, Dr. Anthony Ingraffea, Professor of Engineering Emeritus at Cornell University, outlined more precisely the role U.S. fracking is playing in changing the world’s climate. The most recent climate data suggests that the world is on track to cross the two degrees of warming threshold set in the Paris accord in just 10 to 15 years, says Ingraffea in a 13-minute lecture titled “Shale Gas: The Technological Gamble That Should Not Have Been Taken,” which was posted online on April 4.

That’s if American energy policy follows the track predicted by the U.S. Energy Information Administration, which expects 1 million natural gas wells will be producing gas in the U.S. in 2050, up from roughly 100,000 today. An average global temperature increase of 2° Celsius (3.6° Fahrenheit) will bring catastrophic changes — even as compared against a change of 1.5° C (2.7° F). “Heat waves would last around a third longer, rain storms would be about a third more intense, the increase in sea level would be approximately that much higher and the percentage of tropical coral reefs at risk of severe degradation would be roughly that much greater,” with just that half-degree difference, NASA‘s Jet Propulsion Laboratory explained in a 2016 post about climate change.

A draft report from the Intergovernmental Panel on Climate Change (IPCC), which was leaked this January, concludes that it’s “extremely unlikely” that the world will keep to a 1.5° change, estimating that the world will cross that threshold in roughly 20 years, somewhat slower than Ingraffea’s presentation concludes.

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Hawking’s successor.

‘There Is No Such Thing As Past Or Future’ (G.)

Rovelli’s work as a physicist, in crude terms, occupies the large space left by Einstein on the one hand, and the development of quantum theory on the other. If the theory of general relativity describes a world of curved spacetime where everything is continuous, quantum theory describes a world in which discrete quantities of energy interact. In Rovelli’s words, “quantum mechanics cannot deal with the curvature of spacetime, and general relativity cannot account for quanta”. Both theories are successful; but their apparent incompatibility is an open problem, and one of the current tasks of theoretical physics is to attempt to construct a conceptual framework in which they both work.

Rovelli’s field of loop theory, or loop quantum gravity, offers a possible answer to the problem, in which spacetime itself is understood to be granular, a fine structure woven from loops. String theory offers another, different route towards solving the problem. When I ask him what he thinks about the possibility that his loop quantum gravity work may be wrong, he gently explains that being wrong isn’t the point; being part of the conversation is the point. And anyway, “If you ask who had the longest and most striking list of results it’s Einstein without any doubt. But if you ask who is the scientist who made most mistakes, it’s still Einstein.”

How does time fit in to his work? Time, Einstein long ago showed, is relative – time passes more slowly for an object moving faster than another object, for example. In this relative world, an absolute “now” is more or less meaningless. Time, then, is not some separate quality that impassively flows around us. Time is, in Rovelli’s words, “part of a complicated geometry woven together with the geometry of space”. For Rovelli, there is more: according to his theorising, time itself disappears at the most fundamental level. His theories ask us to accept the notion that time is merely a function of our “blurred” human perception.

We see the world only through a glass, darkly; we are watching Plato’s shadow-play in the cave. According to Rovelli, our undeniable experience of time is inextricably linked to the way heat behaves. In The Order of Time, he asks why can we know only the past, and not the future? The key, he suggests, is the one-directional flow of heat from warmer objects to colder ones. An ice cube dropped into a hot cup of coffee cools the coffee. But the process is not reversible: it is a one-way street, as demonstrated by the second law of thermodynamics. Time is also, as we experience it, a one-way street. He explains it in relation to the concept of entropy – the measure of the disordering of things.

Entropy was lower in the past. Entropy is higher in the future – there is more disorder, there are more possibilities. The pack of cards of the future is shuffled and uncertain, unlike the ordered and neatly arranged pack of cards of the past. But entropy, heat, past and future are qualities that belong not to the fundamental grammar of the world but to our superficial observation of it. “If I observe the microscopic state of things,” writes Rovelli, “then the difference between past and future vanishes … in the elementary grammar of things, there is no distinction between ‘cause’ and ‘effect’.”

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Extract from Carlo Rovelli’s The Order of Time.

Why do things fall? Because “..the movement of things inclines naturally towards where time passes more slowly..”

Time is Elastic (Rovelli)

Reality is often very different from what it seems. The Earth appears to be flat but is in fact spherical. The sun seems to revolve in the sky when it is really we who are spinning. Neither is time what it seems to be. Let’s begin with a simple fact: time passes faster in the mountains than it does at sea level. The difference is small but can be measured with precision timepieces that can be bought today for a few thousand pounds. This slowing down can be detected between levels just a few centimetres apart: a clock placed on the floor runs a little more slowly than one on a table. It is not just the clocks that slow down: lower down, all processes are slower. Two friends separate, with one of them living in the plains and the other going to live in the mountains.

They meet up again years later: the one who has stayed down has lived less, aged less, the mechanism of his cuckoo clock has oscillated fewer times. He has had less time to do things, his plants have grown less, his thoughts have had less time to unfold … Lower down, there is simply less time than at altitude. Einstein understood this slowing down of time a century before we had clocks precise enough to measure it. He imagined that the sun and the Earth each modified the space and time that surrounded them, just as a body immersed in water displaces the water around it. This modification of the structure of time influences in turn the movement of bodies, causing them to “fall” towards each other.

What does it mean, this “modification of the structure of time”? It means precisely the slowing down of time described above: a mass slows down time around itself. The Earth is a large mass and slows down time in its vicinity. It does so more in the plains and less in the mountains, because the plains are closer to it. This is why the friend who stays at sea level ages more slowly. If things fall, it is due to this slowing down of time. Where time passes uniformly, in interplanetary space, things do not fall. They float. Here on the surface of our planet, on the other hand, the movement of things inclines naturally towards where time passes more slowly, as when we run down the beach into the sea and the resistance of the water on our legs makes us fall headfirst into the waves. Things fall downwards because, down there, time is slowed by the Earth.

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Dec 222017
 
 December 22, 2017  Posted by at 8:56 am Finance Tagged with: , , , , , , , , , , ,  11 Responses »


Bill Watterson is God

 

He Died For Our Debts, Not Our Sins – Michael Hudson (Ren.)
Bitcoin Tumbles Below $13,000, Down Almost 40% From Record Peak (BBG)
Crypto Carnage Continues, Bitcoin Falls Back To $13,000 Handle (ZH)
Gold Only Safe Asset Left – David Stockman (USAW)
What Will the Tax Law Do to Over-Indebted Corporate America? (WS)
Subprime Auto Defaults Are Soaring, and Private Equity Has No Way Out (BBG)
The Ghost of Gann: Another Crash is Coming (Ren.)
Catalan Separatists Win Election In Rebuke To Spain and EU (R.)
China’s Creditor Imperialism (PS)
China Uses Cheap Debt To ‘Bend Other Countries To Its Will’ (CNBC)
Fannie And Freddie Are Here To Stay – There Is No Alternative (ZH)
UK’s Secret Brexit Studies Reveal That Airbus Makes Planes (BBG)
Eco-Terrorists Threaten To Inject Acid In Greek Supermarket Products (WaPo)
New Zealand Gives Mount Taranaki Same Legal Rights As A Person (G.)

 

 

Got to love this angle.

He Died For Our Debts, Not Our Sins – Michael Hudson (Ren.)

As many people turn towards their Christian and Jewish faiths this Christmas and Hanukkah in an attempt to make sense of the year that was, at least one economist says we have been reading the bible in an anachronistic way. In fact he has written an entire book on the topic. In ‘…And Forgive them their Debts: Credit and Redemption’ (available this spring on Amazon), Professor Michael Hudson makes the argument that far from being about sex, the bible is actually about economics, and debt in particular. “The Christianity we know today is not the Christianity of Jesus,” says Professor Hudson. Indeed the Judaism that we know today is not the Judaism of Jesus either. The economist told Renegade the Lord’s Prayer, ‘forgive us our sins even as we forgive all who are indebted to us’, refers specifically to debt.

“Most religious leaders say that Christianity is all about sin, not debt,” he says. “But actually, the word for sin and debt is the same in almost every language.” “‘Schuld’, in German, means ‘debt’ as well as ‘offense’ or, ‘sin’. It’s ‘devoir’ in French. It had the same duality in meaning in the Babylonian language of Akkadian.” Professor Michael Hudson has achieved near complete consensus with the assyriologists & biblical scholars that the Bible is preoccupied with debt, not sin. The idea harks back to the concept of ‘wergeld’, which existed in parts of Europe and Babylonia, and set the value of a human life based on their rank, paid as compensation to the family of someone who has been injured or killed. “The payment – the Schuld or obligation – expiates you of the injury caused by the offense,” Dr Hudson said.

People tend to think of the Commandment ‘do not covet your neighbour’s wife’ in purely sexual terms but actually, the economist says it refers specifically to creditors who would force the wives and daughters of debtors into sex slavery as collateral for unpaid debt. “This goes all the way back to Sumer in the third millennium,” he said. Similarly, the Commandment ‘thou shalt not steal’ refers to usury and exploitation by threat for debts owing. The economist says Jesus was crucified for his views on debt. Crucifixion being a punishment reserved especially for political dissidents. “To understand the crucifixion of Jesus is to understand it was his punishment for his economic views,” says Professor Hudson. “He was a threat to the creditors.”

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That’s still some serious losses.

Bitcoin Tumbles Below $13,000, Down Almost 40% From Record Peak (BBG)

Bitcoin sank as much as 21% on Friday, extending its loss from its intraday high this month toward 40%. The digital currency dropped to as low as $12,191.80 before trading at $12,601.75 as of 3:29 p.m. in Hong Kong. Bitcoin, which is down 38% from its peak of $19,511, is still up more than 1,100% this year. Investors are having a “reality check,” said Stephen Innes, head of trading for Asia Pacific at Oanda. “At the heart of the matter was a frenzied demand for coins with limited supply has now led to unsophisticated investors holding the bag at the top.” Bitcoin’s drop comes amid concern that an offshoot is becoming a stronger rival to the more well-known cryptocurrency. Bitcoin cash, which emerged earlier this year amid a split between factions over proposed software upgrades, was added to Coinbase offerings this week.


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Zero Hedge overnight. It’s hard to keep up.

Crypto Carnage Continues, Bitcoin Falls Back To $13,000 Handle (ZH)

The carnage across cyrptocurrencies has escalated with Bitcoin back to a $13K handle, Ethereum back below $700, and Bitcoin Cash below $2,600… Bitcoin is now almost $6,000 off its record high…

ETH and BCH in trouble too…

The question is – which happens first – Bitcoin $10,000 or Gold $1,300?

[..] renowned analyst Peter Schiff issued a foreboding warning to investors buying Bitcoin at current prices. Even with a shaky week, Bitcoin is hovering around the $15,000 mark, after a two-month bull run that saw the price rise by more than 200%. Schiff says those trying to ride the bubble are too late: “People who got it years ago, even people who got it at the beginning of the year have the opportunity to cash out and make a lot of money. But people who are buying it at these prices or higher prices are going to lose practically everything.” The old adage, “buy on the rumor and sell on the news,” seems to be the perfect way to sum up Schiff’s sentiments: “These currencies are going to trade to zero or pretty close to it when the bubble pops. Right now, the only reason why people are buying Bitcoin is because the price is going up. When it turns around, they are not going to sell it for the same reason.”

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Fed flying blind.

Gold Only Safe Asset Left – David Stockman (USAW)

Record high stock and bond prices are flashing danger signs to former Reagan White House Budget Director David Stockman. Stockman contends, “I don’t think we are going to have a liquidity crisis. I think it’s going to be a value reset. I think there is going to be a jarring downward price adjustment both in the stock market and in the bond market. This phantom or phony wealth that has been created since the last crisis is going to basically evaporate.” So, what asset is safe? Stockman says gold and goes onto explain, “I think the time to buy (gold and silver) is ideal. Gold is the ultimate and only real money. Gold is the only safe asset when push comes to shove. They tell you to buy the government bond, that’s a safe asset. It’s not a safe asset at its current price. I am not saying the federal government is going to default in the next two or three years.

I am saying the yield on a 10-year bond of 2.4% is way below of where it’s going to end up. So, the only safe asset left is gold. This crazy Bitcoin mania has drained off what would otherwise be a demand for gold. . . . When Bitcoin collapses, spectacularly, which it will because it’s sheer mania in the markets right now. When it collapses, I think a lot of that demand will come back into gold, as well as people fleeing the standard stock and bond markets for the first time in 9 or 10 years.” What about the so-called Trump tax cuts? Stockman predicts, “I think it’s going to be a fiscal calamity of Biblical proportions. I want to be clear. I am always for tax cuts and shrinking the size of government, but you have to earn it. You have to cut spending and entitlements and this massive defense budget. Obviously, they didn’t do that.

If you look at honest accounting . . this bill will add $2.5 trillion to the public debt which, and this is a key point, is already going to rise by $10 trillion over the next decade based on the current law and taxes that is still in.” “More importantly,” Stockman says, “The central banks realize they cannot keep printing money at these crazy rates, and by that I mean the bond buying. Now, they are going to begin to normalize and shrink their balance sheet . . By the fall (of 2018), they (the Federal Reserve) will be shrinking their balance sheet by $600 billion a year. What that means in plain simple English is that they (the Fed) are dumping $600 billion a year of existing bonds into the market just as Uncle Sam will be attempting to borrow $1.25 trillion more. Now, if you don’t think that is a financial collision waiting to happen, then I am not sure what would be.

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The tax bill is not one-dimensional.

What Will the Tax Law Do to Over-Indebted Corporate America? (WS)

The new tax law is larded with goodies for Corporate America, but there is one shift – a much needed shift – in this debt-obsessed world that will punish over-indebted companies, discourage companies from taking on too much leverage, and perhaps, just maybe, make these companies less risky: The new law sharply limits the deductibility of corporate interest expense. Starting in 2018, a company can only deduct interest expense of up to 30% of its Ebitda (earnings before interest, taxes, depreciation, and amortization). Any amount in interest expense beyond it will no longer be deductible. This will tighten further in 2022, when the deductibility of corporate debt will be capped at 30% of earnings before interest and taxes but after depreciation and amortization expenses.

This is a much smaller number than Ebitda. And interest expense deduction is capped at 30% of that much smaller amount. This will raise the tax bill further. Most impacted will be highly indebted companies, which often have a junk credit rating. And due to this junk credit rating, they also pay higher interest rates. This made the interest expense deduction very valuable. But now it is getting partially gutted. Businesses have long been incentivized to borrow, not only by the extraordinarily low interest rates even for junk-rated companies, but also by the full deductibility of interest expense. And thus encouraged by the tax code, corporate debt has surged. Mergers & acquisitions, share buybacks, leveraged buyouts, and dividends have often been funded at least partially with debt. And over the years, companies have piled on an enormous amount of debt.

According to estimates by the Congressional Joint Committee on Taxation, cited by The Wall Street Journal, the first phase of curtailing interest-expense deductibility – the phase that kicks in next year – would raise $171 billion in tax revenues over 10 years. The second phase that commences in 2022 would raise $307 billion over 10 years. This would be the billions of dollars that highly indebted companies would pay more in taxes because they’re losing the deductible of some of their debts. It will be a significant hit to their after-tax income. It won’t kill them, but it will lower the incentive to borrow.

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It’ll get messier than subprime housing.

Subprime Auto Defaults Are Soaring, and Private Equity Has No Way Out (BBG)

Private-equity firms that plunged headlong into subprime auto lending are discovering just how hard it might be to get out. A Perella Weinberg Partners fund has been sitting on an IPO of Flagship Credit Acceptance for two years as bad loan write-offs push it into the red. Blackstone has struggled to make Exeter Finance profitable, despite sinking almost a half-billion dollars into the lender since 2011 and shaking up the C-suite multiple times. And Wall Street bankers in private say others would love to cash out too, but there’s currently no market for such exits. In the years after the financial crisis, buyout firms poured billions into auto finance, angling for the big profits that come with offering high-interest loans to buyers with the weakest credit.

At rates of 11% or more, there was plenty to be made as sales boomed. But now, with new car demand waning, they’ve found the intense competition – and the lax underwriting standards it fostered – are taking a toll on profits. Delinquencies on subprime loans made by non-bank lenders are soaring toward crisis levels. Fresh investment has dried up and some of the big banks, long seen as potential suitors, have pulled back from the auto lending business. To top it off, state regulators are circling the industry, asking whether it preyed on borrowers and put them in cars they couldn’t afford. “The PE guys sailed into this thing with stars in their eyes. Some of the businesses have done fine and some haven’t,” said Chris Gillock at Colonnade Advisors, a boutique investment bank. But right now, “it’s about as out-of-favor a sector as I can think of.”

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Two more years to go? I don’t know about that. But then, I didn’t predict the ’29 crash either.

The Ghost of Gann: Another Crash is Coming (Ren.)

While the metrics noted above can accurately indicate the peak of an equities bubbles several months in advance, they cannot tell us anything years ahead of time. For this, we must turn to the research of the original wizard of Wall Street, W.D. Gann. He was a finance trader who developed technical analysis tools and forecasting methods based on geometry, astronomy, astrology and ancient mathematics. He was a successful and wealthy speculator, spending decades investigating patterns in equities markets. He concluded that equities exhibited a cyclical trend over decades and thus prices could be predicted long in advance. In 1908, Gann constructed his financial timetable, which tabulated the booms and busts, peaks and troughs of the US equities market.

Just like the Geoist land market cycle, there is a repeating 18-year average between every major cycle. Gann managed to predict the crash of 1929 years in advance. He realised that the timetable would have to be recalibrated on the 25th December 1989. The updated timetable is amazingly accurate from that date onward, predicting the Dot-Com bubble peak in 2000 and its collapse. The GFC peak was off by one year; 2007 instead of one year earlier in 2006. The trough was in 2009, followed by a minor panic in 2015, when the S&P500 dipped but has since boomed. According to the timetable, 2020 will be the peak of the equities bubble, followed by a major crash similar to that of the Dot-Com bubble.

To the economists we’ve spoken to, the peak could range between 2019M09 to 2020M03. Given how large the S&P500 bubble has become, it is worth treading very carefully during this period for those exposed to US equities. Gann is famous for saying: “Every movement in the market is the result of a natural law and of a Cause which exists long before the effect takes place and can be determined years in advance. The future is but a repetition of the past, as the Bible plainly states…”

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How hard will they come down on Catalunya this time? Neither Rajoy nor Brussels can afford to lose face.

Catalan Separatists Win Election In Rebuke To Spain and EU (R.)

Catalonia’s separatists look set to regain power in the wealthy Spanish region after local elections on Thursday, deepening the nation’s political crisis in a sharp rebuke to Prime Minister Mariano Rajoy and European Union leaders who backed him. With nearly all votes counted, separatist parties won a slim majority in Catalan parliament, a result that promises to prolong political tensions which have damaged Spain’s economy and prompted a business exodus from the region. Rajoy, who called the elections after sacking the previous secessionist government, had hoped Catalonia’s “silent majority” would deal separatism a decisive blow in what was a de facto independence referendum, but his hard line backfired.

The unexpected result sets the stage for the return to power of deposed Catalan president Carles Puigdemont who campaigned from self-exile in Brussels. State prosecutors accuse him of sedition, and he faces arrest if he were to return home. “Either Rajoy changes his recipe or we change the country,” Puigdemont, said in a televised speech. He was flanked by four former cabinet members that fled with him. At jubilant pro-independence rallies around Barcelona, supporters chanted “President Puigdemont” and unfurled giant red-and-yellow Catalan flags as the results came in. Puigdemont’s spokesman told Reuters in a text message: “We are the comeback kids.” The result unnerved global markets, contributing to a softer euro and subdued sentiment in stock markets.

Opinion polls had predicted secessionists to fall short of a majority. More than 3,100 firms have moved their legal headquarters outside Catalonia, concerned that the indebted region, which accounts for a fifth of the national economy, could split from Spain and tumble out of the EU and the euro zone by default. Spain has trimmed its growth forecasts for next year, and official data shows foreign direct investment in Catalonia fell 75% in the third quarter from a year earlier, dragging down national investment. The EU’s major powers, Germany and France, have backed Rajoy’s stance despite some criticism of his methods at times.

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China exports Ponzi and overcapacity.

China’s Creditor Imperialism (PS)

Just as European imperial powers employed gunboat diplomacy, China is using sovereign debt to bend other states to its will. As Sri Lanka’s handover of the strategic Hambantota port shows, states caught in debt bondage to the new imperial giant risk losing both natural assets and their very sovereignty. This month, Sri Lanka, unable to pay the onerous debt to China it has accumulated, formally handed over its strategically located Hambantota port to the Asian giant. It was a major acquisition for China’s Belt and Road Initiative (BRI) – which President Xi Jinping calls the “project of the century” – and proof of just how effective China’s debt-trap diplomacy can be.

Unlike International Monetary Fund and World Bank lending, Chinese loans are collateralized by strategically important natural assets with high long-term value (even if they lack short-term commercial viability). Hambantota, for example, straddles Indian Ocean trade routes linking Europe, Africa, and the Middle East to Asia. In exchange for financing and building the infrastructure that poorer countries need, China demands favorable access to their natural assets, from mineral resources to ports. Moreover, as Sri Lanka’s experience starkly illustrates, Chinese financing can shackle its “partner” countries. Rather than offering grants or concessionary loans, China provides huge project-related loans at market-based rates, without transparency, much less environmental- or social-impact assessments.

As US Secretary of State Rex Tillerson put it recently, with the BRI, China is aiming to define “its own rules and norms.” To strengthen its position further, China has encouraged its companies to bid for outright purchase of strategic ports, where possible. The Mediterranean port of Piraeus, which a Chinese firm acquired for $436 million from cash-strapped Greece last year, will serve as the BRI’s “dragon head” in Europe. By wielding its financial clout in this manner, China seeks to kill two birds with one stone. First, it wants to address overcapacity at home by boosting exports. And, second, it hopes to advance its strategic interests, including expanding its diplomatic influence, securing natural resources, promoting the international use of its currency, and gaining a relative advantage over other powers.

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Same story. I’ve said a thousand times that China is buying the world with Monopoly money. It is.

China Uses Cheap Debt To ‘Bend Other Countries To Its Will’ (CNBC)

China’s continents-spanning Belt and Road network threatens to “shackle” partner countries and deprive them of valuable natural assets, according to one critic. Beijing is financing and executing massive infrastructure projects across the 68 nations participating in the ambitious scheme, which snakes along Europe, the Middle East and Asia. These recipient countries, many of them emerging economies in dire need of investment, obtain funding in various forms such as sovereign loans from Chinese President Xi Jinping’s administration and credit from Chinese state-owned banks. But concerns of developing countries taking on unrealistic financial obligations have sparked allegations of what’s being called ‘dept-trap diplomacy.’

Earlier this year, Indian Prime Minister Narendra Modi’s administration released a statement warning of unsustainable debt burdens being created by Belt and Road. “Just as European imperial powers employed gunboat diplomacy, China is using sovereign debt to bend other states to its will,” according to Brahma Chellaney, professor of strategic studies at the New Delhi-based Center for Policy Research, who described Beijing’s policies as “creditor imperialism.” In a stinging editorial published on Project Syndicate, Chellaney — a former adviser to India’s National Security Council — pointed to Sri Lanka as an example. The South Asian state, unable to pay back onerous bills to China, recently handed over its Hambantota port to state owned China Merchants Port Holdings in a $1.1 billion deal that was widely viewed as an erosion of sovereignty.

“As Hambantota shows, China is now establishing its own Hong Kong-style neocolonial arrangements,” Chellaney said. “Like the opium the British exported to China, the easy loans China offers are addictive. And, because China chooses its projects according to their long-term strategic value, they may yield short-term returns that are insufficient for countries to repay their debts,” he explained. As a result, the world’s second-largest economy holds political leverage over governments and can “force borrowers to swap debt for equity, thereby expanding China’s global footprint by trapping a growing number of countries in debt servitude.”

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The government in charge of the bubble.

Fannie And Freddie Are Here To Stay – There Is No Alternative (ZH)

Since the US government nationalized the two GSEs in 2008 in a $187 billion bailout of the mortgage giants, there have been consistent calls for them to be wound down and for the private sector to fill the void. As we discussed, this view is, or was, shared by new Fed Chairman, Jay Powell. Mr. Powell has called on Congress to overhaul the housing finance system, saying he’d like to see the country’s two large mortgage-finance firms, Fannie Mae and Freddie Mac, move out from under government conservatorship. More private capital in those firms would reduce the risk of a taxpayer-funded bailout in the event of a downturn, he said in a speech in July. Although the Fed isn’t responsible for housing finance, it supervises some of the country’s largest lenders who frequently sell their loan to the two agencies. “No single housing finance institution should be too big to fail,” he said.

In August this year, Fannie and Freddie’s regulator, the Federal Housing Finance Agency (FHFA), published the results of its latest annual stress tests on the two GSE’s. The FHFA outlined a “severely adverse” scenario in which US real GDP decline 6.5%, the unemployment rate rises to 10.0%, equity prices decline almost 50%, home prices decline 25% and commercial real estate prices by 35%. Under these conditions, it estimates Fannie and Freddie would need a bailout of up to $100 billion in the form of a draw on the Treasury (depending on how they treat assets to offset tax). Sadly, after almost a decade of federal ownership, the hope that Fannie and Freddie could be wound down has evaporated. Senators on both sides of the political divide have concluded that they are too big and too risky to replace. Proposed legislation in 2018 will see them retained at the centre of the US mortgage industry, rather than replacing them as a previous senate proposal tried and failed four years ago.


Mortgages guaranteed by Fannie and Freddie amount to about $4 trillion and account for about 40% of the total US market.

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The incompetence is painful.

UK’s Secret Brexit Studies Reveal That Airbus Makes Planes (BBG)

For months, journalists tried to get their hands on government papers setting out how leaving the European Union will affect different parts of the British economy. They contained, according to Brexit Secretary David Davis, “excruciating detail.” But despite boasting about their contents, ministers were reluctant to let anyone else see the documents. In November, after being forced to give way by a vote in Parliament, the government allowed lawmakers to read them under controlled conditions. Their phones were confiscated, and they were only permitted to make notes with pen and paper, lest too much information leak into the public domain. “These documents in aggregate represent the most comprehensive picture of our economy on this issue to date,” Davis wrote this month, explaining why he was being cautious about publication.

On Thursday, the documents were released online. There was detail, as promised. “The parts of an aircraft can be simplistically split into three areas,” began the first, on aerospace. It was explained what the industry makes: “structures which include the nose, fuselage, wings, engine nacelles (which encase the engines) and tail; propulsion system which includes engines and propellers, or fan blades; and systems which include the electronics used in the flight system.” It went on to reveal that there are two companies in the world that make large passenger aircraft. Now that the documents are public, these firms can be named as Boeing and Airbus. The paper covering the insurance and pensions sector, which employs one in every 100 British workers, is 2,732 words long. “Insurance business operates by firms writing insurance policies for clients, intermediated by brokers,” it reveals.

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You sure that you want to victimize the victims?

Eco-Terrorists Threaten To Inject Acid In Greek Supermarket Products (WaPo)

Greek supermarkets were forced to withdraw several food and beverage products from their shelves this week, after a group threatened to contaminate them with acid as part of an environmentally influenced protest of Christmas consumerism. Authorities urged residents in Athens and the city of Thessaloniki not to buy or consume certain types of Coca-Cola, a Greek milk brand and packages of meat. Thessaloniki and Athens combined have about 1 million residents who were affected by the precautionary measures. The “Blackgreen Arsonists” — whose name suggests an eco-anarchist outlook — threatened to inject the products with hydrochloric acid, a powerful, colorless corrosive used in research and industry.

They said it was because the thousands of people doing their Christmas shopping meant “the sacrifice of millions of living creatures, slaughtered and drained to the last drop to satisfy consumers’ needs.” To protest this need every year for people to fill their empty lives with “consumer garbage with beautiful and glittering wrappings,” the sabotaged products would be placed on supermarket shelves in the run-up to Christmas. Authorities said they have no information on the identities of the group members. Similar threats have emerged in the past and nothing has happened, though in this case the group included photos of its members injecting something into the products as part of their online threat.

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Real values.

New Zealand Gives Mount Taranaki Same Legal Rights As A Person (G.)

Mount Taranaki in New Zealand is to be granted the same legal rights as a person, becoming the third geographic feature in the country to be granted a “legal personality”. Eight local Maori tribes and the government will share guardianship of the sacred mountain on the east coast of the North Island, in a long-awaited acknowledgement of the indigenous people’s relationship to the mountain, who view it as an ancestor and whanau, or family member. The new status of the mountain means if someone abuses or harms it, it is the same legally as harming the tribe. In the record of understanding signed this week, Mount Taranaki will become “a legal personality, in its own right”, said the minister for treaty negotiations, Andrew Little, gaining similar rights to the Whanganui river, which was granted legal personhood earlier this year.

Little said the agreement offered the best possible protection for the landmark, which is becoming an increasingly popular tourist attraction after Lonely Planet named the Taranaki region the second best place to visit in the world last year. “As a New Plymouth local I grew up under the gaze of the maunga [mountain] so I’m particularly pleased with the respect accorded to local tangata whenua [local people] and the legal protection and personality given to the mountain,” Little said. “Today’s agreements are a major milestone in acknowledging the grievances and hurt from the past as the Taranaki iwi experienced some of the worst examples of Crown behaviour in the 19th century.” As part of the agreement the New Zealand government will apologise to local Maori for historical breaches of the Treaty of Waitangi against the mountain, although local tribes will receive no financial or commercial redress.

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Nov 152017
 
 November 15, 2017  Posted by at 8:53 am Finance Tagged with: , , , , , , , , ,  7 Responses »


Arkady Shaikhet Express 1939

 

Richest 1% Own 50% Of Global Wealth, Poorest 50% Own 1% (BI)
US Auto-Loan Subprime Blows Up Lehman-Moment-Like (WS)
Household Debt Rises By $116 Billion As Credit-Card Delinquencies Pile Up (MW)
Sweden’s Housing Market Shock is Hitting Its Currency (BBG)
ECB Seeks Power To Freeze Bank Deposits (BBG)
What History Teaches About Interest Rates (DR)
Deus ex Mueller isn’t Coming (CJ)
Raqqa’s Dirty Secret (BBC)
How Western Imperial Power Set Out To Destroy Syria (Ren.)
US Directly Supports ISIS Terrorists In Syria – Russia (Tass)
Zimbabwe’s Military Seizes Power (BBG)
Airbnb Puts Automatic Rental Cap On Central Paris Offers (R.)
Airbnb Refuses To Disclose Financial Data To Greece’s Finance Ministry (KTG)

 

 

How do we do it? What an achievement!

Richest 1% Own 50% Of Global Wealth, Poorest 50% Own 1% (BI)

The world’s richest 1% of families and individuals hold over half of global wealth, according to a new report from Credit Suisse. The report suggests inequality is still worsening some eight years after the worst global recession in decades. The release of the Paradise Papers, a trove of leaked documents uncovered by investigative journalists detailing the offshore tax holdings of the world’s super wealthy, has reinforced just how rampant the problem of wealth inequality has become. “The bottom half of adults collectively own less than 1% of total wealth, the richest decile (top 10% of adults) owns 88% of global assets, and the top percentile alone accounts for half of total household wealth,” the Credit Suisse report said.

Put another way: “The top 1% own 50.1% of all household wealth in the world.” This handy pyramid chart, which shows the relative number of people at different wealth levels and how much of the world’s assets each bracket controls, speaks volumes about the level of income concentration, which by some measures has not been seen since the early 20th century:

In most countries, including the United States, a large wealth gap translates into those at the top accruing political power, which in turn can lead to policies that reinforce benefits for the wealthy. President Donald Trump’s tax cut plan, for instance, has been widely criticized for favoring corporations and the wealthy over working families. Measured overall, Credit Suisse found total global wealth rose 6.4% in the year between mid-2016 and mid-2017 to $280.3 trillion. Stock market gains helped add $8.5 trillion to US household wealth during that period, a 10.1% rise. US inequality is considerably worse than in its more developed-country peers.

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You really have to check the dates, to make sure this is not 10 year old news. The key word here is ‘surge’.

US Auto-Loan Subprime Blows Up Lehman-Moment-Like (WS)

Given Americans’ ceaseless urge to borrow and spend, household debt in the third quarter surged by $610 billion, or 5%, from the third quarter last year, to a new record of $13 trillion, according to the New York Fed. If the word “surged” appears a lot, it’s because that’s the kind of debt environment we now have: Mortgage debt surged 4.2% year-over-year, to $9.19 trillion, still shy of the all-time record of $10 trillion in 2008 before it all collapsed. Student loans surged by 6.25% year-over-year to a record of $1.36 trillion. Credit card debt surged 8% to $810 billion. “Other” surged 5.4% to $390 billion. And auto loans surged 6.1% to a record $1.21 trillion. And given how the US economy depends on consumer borrowing for life support, that’s all good.

However, there are some big ugly flies in that ointment: Delinquencies – not everywhere, but in credit cards, and particularly in subprime auto loans, where serious delinquencies have reached Lehman Moment proportions. Of the $1.2 trillion in auto loans outstanding, $282 billion (24%) were granted to borrowers with a subprime credit score (below 620). Of all auto loans outstanding, 2.4% were 90+ days (“seriously”) delinquent, up from 2.3% in the prior quarter. But delinquencies are concentrated in the subprime segment – that $282 billion – and all hell is breaking lose there. Subprime auto lending has attracted specialty lenders, such as Santander Consumer USA. They feel they can handle the risks, and they off-loaded some of the risks to investors via subprime auto-loan-backed securities. They want to cash in on the fat profits often obtained in subprime lending via extraordinarily high interest rates.

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Oh well.

Household Debt Rises By $116 Billion As Credit-Card Delinquencies Pile Up (MW)

The numbers: Household debt rose by $116 billion, or 0.9%, to $12.96 trillion in the third quarter, the New York Fed said Tuesday. Credit-card debt rose by 3.1% while home equity lines of credit, or HELOC, balances fell by 0.9%. There were small gains in mortgage, student and auto debt. Flows into credit-card and auto loans delinquencies rose, with 4.6% of credit card debt 90 days or more delinquent, up from 4.4% in the second quarter, and 2.4% of auto loan debt seriously delinquent, up from 2.3%. That’s still nowhere near the 9.6% of student loan debt that is delinquent, which itself is understated because about half of those loans are currently in deferment, grace periods or in forbearance.

What happened: U.S. households aren’t aggressively leveraging up, and the ones that are did so had better credit. The higher level of auto loan originations was mainly to prime borrowers, and the median credit score to individuals originating new mortgages ticked up to 760 from 754. [..] Auto loans have grown for 26 straight quarters. But there are some worries as subprime auto loan performance continues to deteriorate — the delinquency rate for auto finance companies have grown by more than 2 percentage points since 2014, the New York Fed said.

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World’s biggest housing bubble?

Sweden’s Housing Market Shock is Hitting Its Currency (BBG)

Can a central bank steer the housing market? Not so long ago, Sweden’s Riksbank decided: no. Now, there’s a risk that decision may backfire as the biggest property market in Scandinavia risks sinking into a correction. The evidence of price declines was so worrying on Tuesday that it contributed to a 1.5 percent slump in the krona against the euro. A weak currency puts the Riksbank’s inflation target at risk. So should it be looking at the housing market more closely? Developments in Sweden’s housing market “could spark some doubts at the Riksbank as it may affect the overall economic outlook and inflation,” Nordea analyst Andreas Wallstrom said in a note. Sweden’s Riksbank has thrown all its energy into fighting deflation and, earlier this year, finally regained credibility on its inflation mandate.

Policy makers now say they may be ready to start raising rates in the middle of next year. At the same time, the Riksbank may extend a bond purchase program due to end this year. But in the minutes of the Riksbank’s latest rate meeting, Deputy Governor Cecilia Skingsley suggested that monetary policy, “under certain circumstances, can be used to combat the effects of major household debt.” She also said the housing market “must be carefully monitored,” given the latest developments. Nordea’s Wallstrom says the central bank will probably need to see a “sharp drop” in house prices with a direct impact on the real economy before it will look into adding significant stimulus. But the bank might decided to signal rates will stay where they are for even longer.

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Which would cause panic and bank runs.

ECB Seeks Power To Freeze Bank Deposits (BBG)

The European Central Bank intensified its push for a tool that would hand authorities the power to stop deposit withdrawals when a bank is on the verge of failing. ECB executive board member Sabine Lautenschlaeger said that bank resolution cases this year showed that a so-called moratorium tool, which would temporarily freeze a bank’s liabilities to buy time for crucial decisions, is needed. Her comment comes as policy makers in Brussels debate how such measures should be designed, and just days after the ECB officially called for the moratorium to extend to deposits as well. “If we have a long list of exemptions and we have a moratorium that doesn’t work, I do not want to have a moratorium tool,” Lautenschlaeger told a conference in Frankfurt on Tuesday. “Then you will never use it.”

EU member states appear ready to heed the request, according to a Nov. 6 paper that develops their stance on a bank-failure bill proposed by the European Commission. They suggest giving authorities the power to cap deposit withdrawals as part of a stay on payments only after an institution has been declared “failing or likely to fail.” The power to install a moratorium “can in principle apply to eligible deposits,” the paper reads. “However, resolution authority should carefully assess the opportunity to extend the suspension also to covered deposits, especially covered deposits held by natural persons and micro, small and medium sized enterprises, in case application of suspension on such deposits would severely disrupt the functioning of financial markets.”

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Low interst rates = low growth economies. The chicken and the egg.

What History Teaches About Interest Rates (DR)

“At no point in the history of the world has the interest on money been so low as it is now.” Who can dispute the good Sen. Henry M. Teller of Colorado? For lo eight years, the Federal Reserve has waged a ceaseless warfare upon interest rates. Economic law, history, logic itself, stagger under the onslaughts. We suspect that economic reality will one day prevail. This fear haunts our days… and poisons our nights. But let us check the date on the senator’s declaration… Kind heaven, can it be? We are reliably informed that Sen. Teller’s comment entered the congressional minutes on Jan. 12… 1895. 1895 — some 19 years before the Federal Reserve drew its first ghastly breath! Were interest rates 122 years ago the lowest in world history? And are low interest rates the historical norm… rather than the exception?

Today we rise above the daily churn… canvass the broad sweep of history… and pursue the grail of truth. The chart below — giving 5,000 years of interest rate history — shows the justice in Teller’s argument. Please direct your attention to anno Domini 1895: Rates had never been lower in all of history. They would only sink lower on two subsequent occasions — the dark, depressed days of the early 1930s — and the present day, dark and depressed in its own right. A closer inspection of the chart reveals another capital fact… Absent one instance at the beginning of the 20th century and a roaring exception during the mid-to-late 20th century, long-term interest rates have trended lower for the better part of 500 years.

Paul Schmelzing professes economics at Harvard. He’s also a visiting scholar at the Bank of England, for whom he conducted a study of interest rates throughout history. Could the sharply steepening interest rates that began in the late 1940s be a historical one-off… an Everest set among the plains? Analyst Lance Roberts argues that periods of sharply rising interest rates like this are history’s exceptions — lovely exceptions. Why lovely? Roberts: Interest rates are a function of strong, organic, economic growth that leads to a rising demand for capital over time. In this view, rates rose steeply at the dawn of the 20th century because rapid industrialization and dizzying technological advances had entered the scenery.

Likewise, Roberts argues the massive post-World War II economic expansion resulted in the second great spike in interest rates: There have been two previous periods in history that have had the necessary ingredients to support rising interest rates. The first was during the turn of the previous century as the country became more accessible via railroads and automobiles, production ramped up for World War I and America began the shift from an agricultural to industrial economy. The second period occurred post-World War II as America became the “last man standing”… It was here that America found its strongest run of economic growth in its history as the “boys of war” returned home to start rebuilding the countries that they had just destroyed.

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“If you attribute all your problems to Trump, you’re guaranteeing more Trumps after him..”

Deus ex Mueller isn’t Coming (CJ)

We know from the Snowden leaks on the NSA, the CIA files released by WikiLeaks, and the ongoing controversies regarding FBI surveillance that the US intelligence community has the most expansive, most sophisticated and most intrusive surveillance network in the history of human civilisation. Following the presidential election last year, anonymous sources from within the intelligence community were haemorrhaging leaks to the press on a regular basis that were damaging to the incoming administration. If there was any evidence to be found that Donald Trump colluded with the Russian government to steal the 2016 election using hackers and propaganda, the US intelligence community would have found it and leaked it to the New York Times or the Washington Post last year.

Mueller isn’t going to find anything in 2017 that these vast, sprawling networks wouldn’t have found in 2016. He’s not going to find anything by “following the money” that couldn’t be found infinitely more efficaciously via Orwellian espionage. The factions within the intelligence community that were working to sabotage the incoming administration last year would have leaked proof of collusion if they’d had it. They did not have it then, and they do not have it now. Mueller will continue finding evidence of corruption throughout his investigation, since corruption is to DC insiders as water is to fish, but he will not find evidence of collusion to win the 2016 election that will lead to Trump’s impeachment. It will not happen. This sits on top of all the many, many, many reasons to be extremely suspicious of the Russiagate narrative in the first place.

[..] If you attribute all your problems to Trump, you’re guaranteeing more Trumps after him, because you’re not addressing the disease which created him, you’re just addressing the symptom. The problem is not Trump. The problem is that America is ruled by an unelected power establishment which maintains its rule by sabotaging democracy, exacerbating economic injustice and expanding the US war machine. Stop listening to the lies that they pipe into your echo chambers and turn to face your real demons.

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“IS may have been homicidal psychopaths, but they’re always correct with the money.” Says Abu Fawzi with a smile.

Raqqa’s Dirty Secret (BBC)

Lorry driver Abu Fawzi thought it was going to be just another job. He drives an 18-wheeler across some of the most dangerous territory in northern Syria. Bombed-out bridges, deep desert sand, even government forces and so-called Islamic State fighters don’t stand in the way of a delivery. But this time, his load was to be human cargo. The Syrian Democratic Forces (SDF), an alliance of Kurdish and Arab fighters opposed to IS, wanted him to lead a convoy that would take hundreds of families displaced by fighting from the town of Tabqa on the Euphrates river to a camp further north. The job would take six hours, maximum – or at least that’s what he was told. But when he and his fellow drivers assembled their convoy early on 12 October, they realised they had been lied to. Instead, it would take three days of hard driving, carrying a deadly cargo – hundreds of IS fighters, their families and tonnes of weapons and ammunition.

Abu Fawzi and dozens of other drivers were promised thousands of dollars for the task but it had to remain secret. The deal to let IS fighters escape from Raqqa – de facto capital of their self-declared caliphate – had been arranged by local officials. It came after four months of fighting that left the city obliterated and almost devoid of people. It would spare lives and bring fighting to an end. The lives of the Arab, Kurdish and other fighters opposing IS would be spared. But it also enabled many hundreds of IS fighters to escape from the city. At the time, neither the US and British-led coalition, nor the SDF, which it backs, wanted to admit their part. Has the pact, which stood as Raqqa’s dirty secret, unleashed a threat to the outside world – one that has enabled militants to spread far and wide across Syria and beyond?

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Narratives are starting to move.

How Western Imperial Power Set Out To Destroy Syria (Ren.)

Virtually unknown among large swaths the general public both in Britain and the U.S is the fact that Bashar-al Assad’s secular government won the first contested presidential election in Ba’athist Syria’s history on July 16, 2014, which was reported as having been open, fair and transparent. American Peace Council delegate, Joe Jamison, who was allowed unhindered travel throughout Syria, stated: “By contrast to the medieval Wahhabist ideology, Syria promotes a socially inclusive and pluralistic form of Islam. We [the USPC] met these people. They are humane and democratically minded…. The [Syrian] government is popular and recognised as being legitimate by the UN. It contests and wins elections which are monitored. There’s a parliament which contains opposition parties – we met them. There is a significant non-violent opposition which is trying to work constructively for its own social vision.”

Jamison added: “Our delegation came to Syria with political views and assumptions, but we were determined to be sceptics and to follow the facts wherever they led us”, he said. “I concluded that the motive of the US war is to destroy an independent, Arab, secular state. It’s the last of this kind of state standing.” The notion that the United States government and its allies and proxies, want to see the destruction of Syria’s pluralistic state under Assad destroyed, is hardly a secret. Indeed, one of Washington’s key allies in the region, Israel, has conceded as much. The claim by Israel’s defence minister, Avigdor Lieberman, that Assad’s removal is the empires “ultimate goal”, would appear to be consistent with the notion that the aim of the U.S government is to stymie the non-violent opposition inside Syria. Washington has been engaged in this strategy since early 2012 after having deliberately helped scupper Kofi Annan’s six point peace plan.

Members of the Syrian opposition within a newly reformed constitution who wanted to participate in democratic politics have instead been encouraged by the Western axis – as a result of bribing government forces to defect and through funding the Free Syrian Army – to overthrow the Assad government by violent means. As commentator Dan Glazebrook put it: “Within days of Annan’s peace plan gaining a positive response from both sides in late March, the imperial powers openly pledged, for the first time, millions of dollars for the Free Syrian Army; for military equipment, to provide salaries to its soldiers and to bribe government forces to defect. In other words, terrified that the civil war is starting to die down, they are setting about institutionalising it.”

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Now proven by the BBC. What’s next?

US Directly Supports ISIS Terrorists In Syria – Russia (Tass)

The Russian Defense Ministry has said it has obtained evidence the US-led coalition provides support for the terrorist group Islamic State (outlawed in Russia). “The Abu Kamal liberation operation conducted by the Syrian government army with air cover by the Russian Aerospace Force at the end of the last week revealed facts of direct cooperation and support for ISIS terrorists by the US-led ‘international coalition,’” the Russian Defense Ministry said. The ministry showed photo shoots made by Russian unmanned aircraft on November 9 which show kilometers-long convoys of IS armed groups leaving Abu Kamal towards the Wadi es-Sabha passage on the Syrian-Iraqi border to avoid strikes by the Russian aviation and the government army.

The US refused to conduct airstrikes over the leaving IS convoy. “Americans peremptorily rejected to conduct airstrikes over the ISIS terrorists on the pretext of the fact that, according to their information, militants are yielding themselves prisoners to them and now are subject to the provisions of the Convention relative to the Treatment of Prisoners of War,” the Russian Defense Ministry said. The Defense Ministry specified that “the Russian force grouping command twice addressed the command of the US-led ‘international coalition’ with a proposal to carry out joint actions to destroy the retreating ISIS convoys on the eastern bank of the Euphrates.” The Americans failed to answer the Russian side’s question on why IS militants leaving in combat vehicles heavily equipped are regrouping in the area controlled by the international coalition to conduct new strikes over the Syrian army near Abu Kamal, the Russian Defense Ministry stressed.

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Mugabe under house arrest and according to South African media ‘planning to step down’. Rumors that Emmerson Mnangagwa, the vice-president Mugabe fired recently, will be interim president. Which in turn would confirm that the army acted because it doesn’t want Grace Mugabe in power.

Zimbabwe’s Military Seizes Power (BBG)

The armed forces seized power in Zimbabwe after a week of confrontation with President Robert Mugabe’s government and said the action was needed to stave off violent conflict in the southern African nation that he’s ruled since 1980. The Zimbabwe Defense Forces will guarantee the safety of Mugabe, 93, and his family and is only “targeting criminals around him who are committing crimes that are causing social and economic suffering in the country in order to bring them to justice,” Major-General Sibusiso Moyo said in a televised address in Harare, the capital. All military leave has been canceled, he said. Denying that the action was a military coup, Moyo said “as soon as we have accomplished our mission we expect the situation to return to normalcy.” He urged the other security services to cooperate and warned that “any provocation will be met with an appropriate response.”

The action came a day after armed forces commander Constantine Chiwenga announced that the military would stop “those bent on hijacking the revolution.” As several armored vehicles appeared in the capital on Tuesday, Mugabe’s Zimbabwe African National Union-Patriotic Front described Chiwenga’s statements as “treasonable” and intended to incite insurrection. Later in the day, several explosions were heard in the city. The military intervention followed a week-long political crisis sparked by Mugabe’s decision to fire his long-time ally Emmerson Mnangagwa as vice president in a move that paved the way for his wife Grace, 52, and her supporters to gain effective control over the ruling party. Nicknamed “Gucci Grace” in Zimbabwe for her extravagant lifestyle, she said on Nov. 5 that she would be prepared to succeed her husband.

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65,000 homes in Paris alone.

Airbnb Puts Automatic Rental Cap On Central Paris Offers (R.)

Short-term rental website Airbnb, which has been challenging traditional hotel operators such as Accor and Marriott, said it would automatically cap the number of days its hosts can rent their property each year in central Paris. The decision, which goes into effect in January and mirrors initiatives already in place in London and Amsterdam, will force hosts to effectively comply with France’s official limit on short-term rentals of 120 days a year for a main residence. It comes as Airbnb, similar to its taxi-hailing peer Uber, is facing a growing crackdown from legislators worldwide – triggered in part by lobbying from the hotel industry, which sees the rental service as providing unfair competition. Airbnb and other rental platforms have also been criticized for driving up property prices and contributing to a housing shortage in some cities such as Paris or Berlin.

Airbnb, which has denied having a significant impact on housing shortages, has been trying to placate local authorities. “Paris is Airbnb number one city worldwide and we want to insure our community of hosts expands in a responsible and sustainable manner,” said Emmanuel Marill, Airbnb general manager for France. In Paris, the automatic rental cap will apply only to the city’s first four districts (“arrondissements”) unless the property owner has proper authorization. These districts include tourist hotspots such as the Marais, and landmarks such as the Louvre and the place de la Concorde square. Airbnb is implementing the cap as the Paris city council has made it mandatory from December for people renting their apartments on short-term rental websites to register their property with the town hall.

Ian Brossat, the housing advisor to the Paris Mayor, told Reuters that the cap should extend to the whole of Paris. “Under the law, websites must withdraw listings that do not comply with the law throughout Paris. One cannot accept that a website complies with the law only in the first four arrondissements of Paris,” said Brossat. With over 400,000 listings, France is Airbnb’s second-largest market after the United States. Paris, which is the most visited city in the world, is Airbnb’s biggest single market, with 65,000 homes.

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Fine them until they do?! Half the city of Athens will turn into Airbnb if they don’t.

Airbnb Refuses To Disclose Financial Data To Greece’s Finance Ministry (KTG)

Airbnb refused to provide the Greek Finance Ministry with information on property rentals thus delaying the launch of an online platform where owners should register the rental transactions and pay the necessary taxes. According to information obtained by economic news website economy365.gr, the Finance Ministry has tried for five months to get in touch with executives of the company in California as well as of other companies (Novasol etc). However, the companies showed no intention to cooperate with Greek authorities who have requested that the tax number of property owner is being registered to every property at the Airbnb platform. Owner’s tax number would facilitate the imposition of taxes on rentals via Airbnb. The tax legislation on short-term leases through digital platform like Airbnb was voted last year. The law foresees taxes of 15%-45% and a limited number of rentals per year.

Registration is mandatory. Authorities will provide the property owner with a certification number that has to be declared on any website and social media advert, including, of course, the Airbnb platform. Fines can reach up to 5,000 euros, if a property owner does not register on the Greek authorities registration platform and tries to evade taxes from short-term rentals. The state has estimated that revenues from Airbnb rentals could reach 48 million euros per year. According to the Finance Ministry property owners try to bypass the 3% commission to Airbnb and upcoming taxes by direct contact to customers via messenger or telephone. The payments are done cash at the arrival and not through the platform. In this way, property owners can bypass not only the commission but also registration of the rentals and future taxes. Just in case and even if one day, the Airbnb decides to hand over its Greek data to the tax authorities. For the time being it looks as the Greek goal to tax Airbnb properties has to be postponed.

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Aug 112017
 
 August 11, 2017  Posted by at 8:36 am Finance Tagged with: , , , , , , , ,  7 Responses »


Jackson Pollock Reflection of the Big Dipper 1947

 

It’s Hard to Price an ‘Extinction Event’ Like a North Korea War (BBG)
In Debt We Trust for US Consumers With $12.7 Trillion Burden (BBG)
Tesla Cars Aren’t As Carbon (And Taxpayer) Friendly As You Think (FMS)
Uber Gets Run Over by its Own Subprime Auto Leases (WS)
Amazon Online Grocery Boom? Not So Fast… (WS)
Amazon Paid Just £15 Million In Tax On European Revenues Of £19.5 Billion (G.)
Airbnb Faces EU Clampdown For Not Paying ‘Fair Share’ Of Tax (G.)
Trump Will Soon Declare State Of Emergency Over Opioid Crisis (G.)
Why Saudi Arabia And Israel Have United Against Al-Jazeera (FIsk)
‘Subprime Is Contained’ -They Really Don’t Know What They Are Doing (Snider)
What Went Wrong With the 21st Century? (Bonner)
Black Swan At Bavarian Palace Seeks Partner (DW)

 

 

There are many voices saying crazy things in this North Korea thing, and I’m not even watching CNN. But this is the craziest thing of all: how to make money off a nuclear attack. These people are mentally blind.

It’s Hard to Price an ‘Extinction Event’ Like a North Korea War (BBG)

Financial markets haven’t really reacted much to the escalation in tensions between the U.S. and North Korea, and some observers explain that it’s largely because in the worst-case scenario it’s impossible to guess the appropriate price for things like stocks and bonds. “It’s hard to price a potentially extinction event (at least for much of the Korean peninsula),” is how Timothy Ash, a senior strategist at Bluebay Asset Management in London, puts it. It’s a point also made by Mark Mobius, the Templeton Emerging Markets Group executive chairman and apostle for emerging-market investing. He said in a May interview about the prospect of a North Korean nuclear conflict: “there’s nothing you can do about it – if something breaks out, we’re all finished anyway.” Maybe that’s why the worst day this year for the Kospi index of South Korean stocks was July 28, which was all about a global tech-stock retreat and nothing to do with geopolitics.

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“This increase in leverage has sapped our ability to spend,” Roberts said. “I think we’re stuck.”

In Debt We Trust for US Consumers With $12.7 Trillion Burden (BBG)

After deleveraging in the aftermath of the last U.S. recession, Americans have once again taken on record debt loads that risk holding back the world’s largest economy. Household debt outstanding – everything from mortgages to credit cards to car loans – reached $12.7 trillion in the first quarter, surpassing the previous peak in 2008 before the effects of the housing market collapse took its toll, Federal Reserve Bank of New York data show. To put the borrowing in perspective, it’s more than the size of China’s economy or almost four times that of Germany’s. People are borrowing more not necessarily because they’re confident about their financial prospects. They’re doing it for necessities like education or transportation and, in many cases, just to get by.

On the surface, liabilities at an all-time high aren’t alarming when the assets side of ledger is taken into account. Household net worth stands at a record $94.8 trillion, thanks to rebounding home values and soaring stock portfolios. But that increase has primarily benefited the nation’s wealthiest, said Lance Roberts, chief investment strategist at Clarity Financial in Houston and editor of the Real Investment Advice newsletter. “When you look at net worth, it’s heavily skewed by the top 10%,” Roberts said. “The average family of four is living paycheck to paycheck.” For most Americans, whose median household income, adjusted for inflation, is lower than it was at its peak in 1999, borrowing has been the answer to maintaining their standard of living. The increase in debt helps explain why the economy’s main source of fuel is providing less of boost than in the past.

Personal spending growth has averaged 2.4% since the recession ended in 2009, less than the 3% of the previous expansion and 4.3% from 1982-90. A look at worker pay presents a more dire backdrop for discretionary spending for those without a lot of assets. While the difference between income from wages and household debt has improved since the last recession, it’s been leveling off and remains at a depressed level. The improvement also reflects less mortgage debt because of increased home foreclosures, rather than a pickup in earnings. “This increase in leverage has sapped our ability to spend,” Roberts said. “I think we’re stuck.”

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A series of articles on today’s new marvels, Tesla, Uber, Amazon, Airbnb. They all fall to bits, one by one.

Tesla is a highly destructive company. All it takes is a basic understanding of thermodynamics. Strip-mining, cutting down forests, throwing the Congo into even deeper misery, just so you can fool yourself into thinking you’re clean.

Tesla Cars Aren’t As Carbon (And Taxpayer) Friendly As You Think (FMS)

Tesla proponents love to remind people how their vehicles are “carbon free” (in spite of Tesla CEO Elon Musk’s own carbon profligate lifestyle): Fact: the Tesla Model S is an environmentally friendly, zero emissions electric vehicle that won’t pollute the air like gas-powered cars. Carbon emissions from a gas car’s tailpipe has a dangerous impact on global warming…. In addition, Tesla CEO Elon Musk explains that, “combustion cars emit toxic gases. According to an MIT study, there are 53,000 deaths per year in the U.S. alone from auto emissions.” But in reminding people about how they don’t burn fossil fuels, they make sure to omit and/or obfuscate all the other emissions-laden factors that go into production of Tesla automobiles, including the oft-unspoken costs of the vehicles to the taxpayer and to other auto manufacturers.

Start with the power source for the Tesla; their electric power plant uses lithium-ion batteries to store the electricity required to run the car. And while a good amount of lithium is produced at salt lake brines that use chemical processes to extract the requisite lithium… …a large (and growing) amount of lithium is sourced from hard-rock mining, which is also referred to as strip mining: This type of mining involves not just all the carbon used to extract the lithium from mines, it “strips” the land of its forests, which is far more environmentally (and carbon) detrimental. And while it is likely impossible to know exactly where Tesla sources its materials from, a closer examination on Tesla’s impact on the mining industry should paint a crystal clear picture:

Should the concept capture the imagination of Americans who are increasingly conscious of reducing their carbon footprint demand for these crucial elements could skyrocket in addition to the already robust global demand for lithium, nickel and copper. Major mining companies are already “future proofing” their businesses for climate change by focusing more investment into commodities that will be required by the renewable energy industry. You can’t make this stuff up – Tesla and other renewable energy industries are going to save the world by mining its natural resources to excess, without regard for the environmental impact and carbon emissions generated in the process. You shouldn’t be surprised to seldom hear this mentioned by Elon Musk, or the liberal crowd that champions electric vehicles.

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This is too insane to be labelled a ‘business model’.

Uber Gets Run Over by its Own Subprime Auto Leases (WS)

Uber, which has lost $3 billion last year and has gotten itself into a thicket of intractable issues and scandals that cost founder and CEO Travis Kalanick his job, is now facing a subprime auto-leasing crisis. Two years ago when these folks launched the subprime auto leasing program to put their badly paid drivers into new vehicles they couldn’t otherwise afford, they apparently didn’t do the math. In July 2015, when the “Xchange Leasing” program was announced, the company gushed: “We’re excited about how these new solutions meet drivers’ unique needs, and offer more and better choices and greater flexibility than ever before.” The leasing program would be “administered by an Uber subsidiary and designed to fit with the flexibility that drivers value most,” it said. This is how it would work:

Unlike most multi-year leases that have high fees for early termination, drivers who participate in Xchange for at least 30 days will be able to return the car with only two weeks notice, and limited additional costs. The program allows for unlimited mileage and the option to lease a used car, with routine maintenance also included. It wasn’t supposed to be a money maker – nothing at Uber is. But hey. And the company invested $600 million in the business, “people familiar with the matter” told the Wall Street Journal. This type of lease was offered to drivers with subprime credit ratings or no credit ratings who barely earned enough money to get by and make the payments, if they stuck around long enough. It allowed drivers to drive new cars. When it didn’t work out for them, they could return the cars after 30 days with two weeks’ notice.

The only penalty for the early return is that Uber keeps the $250 deposit. And these leases came with “unlimited miles.” No one in the car business would ever conceive of such a thing. But Uber is different. It defies the laws of economics. Or so it thought at the time. Now, the 14-member executive committee that is running the show looked at the math and was horrified. “According to people familiar with the matter,” cited by The Journal, executives had briefed the committee in July: “The Xchange Leasing division had been estimating modest losses of around $500 per auto on average, these people said. But managers recently informed Uber executives that the losses were actually about $9,000 per car — about half the sticker price of a typical leased vehicle.”

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So your ass can shoot roots into your couch. Yeah, that’s a valid business model.

Amazon Online Grocery Boom? Not So Fast… (WS)

Maybe Amazon has figured out that you’re not the only one who isn’t buying groceries online. Maybe it has figured out, despite all the money it has thrown at it, that selling groceries online is a very tough nut to crack. And no one has cracked it yet. Numerous companies have been trying. Safeway started an online store and delivery service during the dotcom bubble and has made practically no headway. A plethora of startups, brick-and-mortar retailers, and online retailers have tried it, including the biggest gorillas of all — Walmart, Amazon, and Google. Google is trying it in conjunction with Costco and others. It just isn’t catching on. And this has baffled many smart minds. Online sales in other products are skyrocketing and wiping out the businesses of brick-and-mortar retailers along the way. But groceries?

That’s one of the reasons Amazon is eager to shell out $14.7 billion to buy Whole Foods, its biggest acquisition ever, dwarfing its prior biggest acquisition, Zappos, an online shoe seller, for $850 million. Amazon cannot figure out either how to sell groceries online though it has tried for years. Now it’s looking for a new model — namely the old model in revised form? This is why everyone who’s online wants to get a piece of the grocery pie: The pie is big. Monthly sales at grocery stores in June seasonally adjusted were $53 billion. For the year 2016, sales amounted to $625 billion: But it’s going to be very tough for online retailers to muscle into this brick-and-mortar space, according to Gallup, based on its annual Consumption Habits survey, conducted in July. Consumers just aren’t doing it:

Only 9% of US households say they order groceries online at least once a month, either for pickup or delivery. Only 4% do so at least once a week. By contrast, someone in nearly all households (98%) goes to brick-and-mortar grocery stores at least once a month, and 83% go at least once a week. Gallup summarizes the quandary: At this point, online grocery shopping appears to be an adjunct to retail shopping rather than a replacement, as most shoppers whose families purchase groceries online once or twice a month or more say they still visit a store to buy groceries at least once a week. But there are some differences by age group – and maybe that’s where Amazon sees some distant hope: Of the 18-29 year olds, 15% shop for groceries on line at least once a month. For 30-49 year olds, this drops to 12%. For 50-64 year olds, it drops to 10%. For those 65 and older, it essentially fades out (2%).

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No profit, just working on a monopoly. Cut it down.

Amazon Paid Just £15 Million In Tax On European Revenues Of £19.5 Billion (G.)

Amazon paid just €16.5m (£15m) in tax on European revenues of €21.6bn (£19.5bn) reported through Luxembourg in 2016. The figures, published in Amazon’s latest annual accounts for its European online retail business, are likely to reignite the debate about US tech companies using complex crossborder arrangements to minimise the tax they pay across the continent. Separately, Amazon UK Services – the company’s warehouse and logistics operation that employs almost two-thirds of its 24,000 UK staff – more than halved its declared UK corporation tax bill from £15.8m to £7.4m year-on-year in 2016. The cut came despite turnover at the UK business, which handles the packing and delivery of parcels and functions such as customer service, rising from £946m to £1.46bn.

Ana Arendar, Oxfam’s head of inequality, said: “Despite some action by ministers and companies, widespread corporate tax avoidance continues to cost both rich and poor countries billions every year that could pay for schools and lifesaving healthcare. “We urgently need comprehensive public country-by-country reporting for multinationals to ensure they pay their fair share of tax – the UK government should implement this by the end of 2019 – unilaterally if necessary.” Amazon Europe, which is based in Luxembourg and aggregates the billions of pounds of sales the retailer makes from individual countries across the continent, reported a pre-tax profit of €59.6m last year. As a result the company, which clocked up €21.6bn in sales across Europe last year, had a tax bill of just €16.5m.

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This seems the easiest thing to contain. 90% of it is advertized online. Take average occupancy in a city, at average prices, and tax them on it.

Airbnb Faces EU Clampdown For Not Paying ‘Fair Share’ Of Tax (G.)

EU finance ministers will discuss how to force home-sharing platforms such as Airbnb to pay their fair share of taxes and in the right tax domains next month after the French minister for the economy described the current situation as “unacceptable”. The European commission announced on Thursday that a joint proposal from France and Germany would be discussed at a meeting in Tallinn, Estonia, on 16 September. Brussels will also advise on how best to deal with the so-called sharing economy, in which Airbnb is a major player. It was revealed this week that Airbnb paid less than €100,000 (£90,336) in French taxes last year, despite the country being the room-booking firm’s second-biggest market after the US.

In response, the French economy minister, Bruno Le Maire, informed the national assembly that the EU’s Franco-German axis would be proposing a pan-European clampdown. “These digital platforms make tens of millions of sales and the French treasury gets a few tens of thousands,” the minister said, adding that the current setup was “unacceptable”. Le Maire further claimed in parliament that an ongoing consultation being led by the commission and the OECD to address the tax question were “taking too much time, it’s all too complicated”. Many digital platforms operating in the EU have a base in Ireland, including Airbnb, where they can exploit a low corporation tax regime. Le Maire said: “Everybody has to pay a fair contribution.”

I[..] Paris city council has already voted to make it mandatory from 1 December to obtain a registration number from the town hall before posting an advertisement for a short-term rental on its website. The ruling potentially makes it harder for property owners using Airbnb to exceed the 120 days a year legal rental limit for a main residence, and easier for the authorities to collect local taxes. In Barcelona, where tensions have been rising for years over the surge in visitors, the impact of sites such as Airbnb on the local housing market has led to anti-tourist protests. In Mallorca and San Sebastián, an anti-tourism march is being planned for 17 August to coincide with Semana Grande, a major festival of Basque culture.

In Ibiza, the authorities are placing a cap on the number of beds for tourists. Owners will also be banned from renting their homes, or rooms within them, via websites such as Airbnb and Homeaway unless they obtain a licence. Owners face fines of up to €400,000 if they break the law. The websites face the same fine for letting people advertise without a valid licence number.

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Cut out the stupid pharma ads and you’re halfway there.

Trump Will Soon Declare State Of Emergency Over Opioid Crisis (G.)

Donald Trump signaled he could soon declare a state of emergency in an attempt to deal with America’s opioid overdose crisis. A commission reporting to the president said recently that declaring a state of emergency was its “first and most urgent recommendation”. But Trump, in his first remarks on the subject, appeared to set his face against treating the epidemic as a health emergency – calling instead for tougher prison sentences and “strong, strong law enforcement”. However, returning to the issue on Thursday, Trump seemed to have changed his tone. “We’re going to draw it up and we’re going to make it a national emergency,” he said, adding the administration is “drawing documents now to so attest”. “It is a serious problem the likes of which we have never had,” Trump said at his Bedminster, New Jersey, golf resort, where he is on a “working vacation”.

The president can declare a state of emergency two legal ways: he could use the Stafford Act, or the Public Health Service Act, which is specific to health emergencies and can be declared by the health secretary. “When I was growing up they had the LSD, and they had certain generations of drugs,” Trump said. “There’s never been anything like what’s happened to this country over the last four or five years. And I have to say this in all fairness, this is a worldwide problem, not just a United States problem. This is happening worldwide.” In fact, while drug overdoses happen all over the world, the US leads by a significant margin. Though the nation has just 4% of the world’s population, the US also has 27% of the world’s drug overdose deaths, according to the UN’s 2017 World Drug Report. For example, for every million Americans between 15 and 64 years old, 245 people per year die of drug overdoses. In Mexico, 4 people per million die of drug overdoses.

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Best friends.

Why Saudi Arabia And Israel Have United Against Al-Jazeera (FIsk)

Being an irrational optimist, there’s an innocent side of my scratched journalistic hide that still believes in education and wisdom and compassion. There are still honourable Israelis who demand a state for the Palestinians; there are well-educated Saudis who object to the crazed Wahhabism upon which their kingdom is founded; there are millions of Americans, from sea to shining sea, who do not believe that Iran is their enemy nor Saudi Arabia their friend. But the problem today in both East and West is that our governments are not our friends. They are our oppressors or masters, suppressors of the truth and allies of the unjust.

Netanyahu wants to close down Al Jazeera’s office in Jerusalem. Crown Prince Mohammad wants to close down Al Jazeera’s office in Qatar. Bush actually did bomb Al Jazeera’s offices in Kabul and Baghdad. Theresa May decided to hide a government report on funding “terrorism”, lest it upset the Saudis – which is precisely the same reason Blair closed down a UK police enquiry into alleged BAE-Saudi bribery 10 years earlier. And we wonder why we go to war in the Middle East. And we wonder why Sunni Isis exists, un-bombed by Israel, funded by Sunni Gulf Arabs, its fellow Sunni Salafists cosseted by our wretched presidents and prime ministers. I guess we better keep an eye on Al Jazeera – while it’s still around.

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And these guys are still seen as authorities. They may be dumb, but they’re not the dumbest.

‘Subprime Is Contained’ -They Really Don’t Know What They Are Doing (Snider)

Ben Bernanke, then Chairman of the Federal Reserve, told Congress in March 2007 that subprime was contained. He will rightfully be remembered in infamy for that, but that wasn’t the most egregious example of being wrong. Even putting it in those terms risks understating the problem and why it stubbornly lingers. Being really wrong is claiming that IOER will establish a floor for money market rates, and then finding out it actually doesn’t. No, what policymakers did especially in the early crisis period was altogether worse; they demonstrated conclusively that though they shared this world with the rest of us, they inhabited and continue to inhabit a totally different planet. Given the anniversary date and our human affinity for round numbers (ten years or a lost decade), there is a desire to revisit some of the worst of the list which happened just before August 9, 2007. My favorite has always been Bill Dudley, as I recounted last at the ninth anniversary of nothing being done:

As far as the issue of material nonpublic information that shows worse problems than are in the newspapers, I’m not sure exactly how to characterize that because I guess I wouldn’t know how to characterize how bad the newspapers think these problems are. [Laughter] We’ve done quite a bit of work trying to identify some of the funding questions surrounding Bear Stearns, Countrywide, and some of the commercial paper programs. There is some strain, but so far it looks as though nothing is really imminent in those areas.” [emphasis added]

He spoke those words, recorded for posterity, on August 7, 2007, at the regular FOMC policy meeting. As noted earlier today, both Countrywide and the whole commercial paper market would be decimated really within hours from his “inspiring” confidence. What really stands out is for Dudley to have been the one who said them, because as head of the Open Market Desk he had to be technically proficient in a way that the others could avoid (and why so often in its history policy discussions especially about these great things would often flow through whomever was the Open Market Desk chief at that moment in time). He proved still to be an empty suit like the rest, but he was always that much less of one. So if the best the Fed had to offer was so thoroughly unaware, is it any wonder what happened then and continues to happen now?

One day after Dudley’s private embarrassment, one Bank of England governor and future chief perhaps joined his level in the Hall of Fame of Famous Last Words. Meryn King remarked on August 8, 2007: “So far what we have seen is not a threat to the financial system. It’s not an international financial crisis.” He said these words at the behest of the ECB in front of the assembled press ostensibly to impart calm. Also noted earlier today, it was the European Central Bank that made the first crisis move the very next day in a record liquidity injection.

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“There’s nothing like it. Get on the wrong side of time, and you are out of luck.”

What Went Wrong With the 21st Century? (Bonner)

And it’s Time Time Time
And it’s Time Time Time
And it’s Time Time Time
That you love
And it’s Time Time Time

To bring readers fully up to speed, the 21st century has been a flaming dud. In practically every way. Despite more new technology than ever… more PhDs… more researchers… more patents… more earnest strivers than ever before sweating to move things ahead… and despite more “stimulus” from the Fed ($3.6 trillion) than ever in history…U.S. GDP growth rates are only half of those of the last century. And household incomes, after you factor in inflation, are flat. In fact, by some calculations – using non-fiddled measures of inflation – growth has been negative for the whole 21st century. Meanwhile, there are more people tending bar or waiting tables… and fewer people with full-time breadwinner jobs. And productivity and personal savings rates have collapsed.

And those are only the measurable trends. Political and social developments have been similarly dud-ish – including the longest, losingest war in U.S. history… the biggest government deficits… the most vulgar public life… the least personal freedom… and, in our hometown, Baltimore, a record murder rate. What went wrong? Herewith, a hypothesis. It suggests three “causes,” all three linked by a single shared element: time.

[..] Fake money causes people to waste time and money. And central bank policies discourage savings by lowering interest rates… even pushing them into negative territory. Instead of saving them for the future… resources are consumed today. These mistakes accumulate as debt… which then forces people to spend more time servicing the mistakes of the past. Meanwhile, the internet gives people a new way to waste time. At home. At work. On the high plains. Or in the lowlife back alleys. People spend their precious time on idle distractions and entertainments. That leaves fewer people doing the real work that progress requires – saving, investing, and working for the future. Time is always the ultimate constraint. You can substitute one resource for another. You can switch from oil to solar… or copper to aluminum. But there’s no swapping out time. There’s nothing like it. Get on the wrong side of time, and you are out of luck.

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Oh please, can I include this? Just so Nassim Taleb knows black swans get lonely?! Like they’re unqiue but they do come in pairs… Philosophical intrigue galore.

Black Swan At Bavarian Palace Seeks Partner (DW)

The Rosenau Palace in southern Germany has published a lonely hearts ad on behalf of its resident black swan. Ground keepers believe the bird’s former companion was eaten by a fox. The department that oversees state-owned palaces, gardens and lakes in the southern state of Bavaria sent out its rather unusual appeal to the public on Thursday. “The sex of the animal isn’t important,” a message on the department’s website read. “Ideally it should be more than three years old, but this isn’t an absolute must.” The department has been on the lookout for a match since May, when one of the two black swans that lived in the palace grounds disappeared. Palace gardeners later found bones and feathers in one of the park’s bushes. “He was probably eaten by a fox,” the department concluded.

Rosenau garden department head Steffen Schubert has been sending out enquiries every day to try and locate a candidate – without success. Finding a replacement isn’t just about sparing the surviving swan from loneliness, he says. “Swans have a special significance in the history of Rosenau Palace and park,” he said. Black swans were reportedly first introduced to the palace grounds by Britain’s Queen Victoria as a symbol of mourning following the premature death of her husband Prince Albert, who was born at Rosenau Palace in 1819. The royals visited the palace together in 1845, five years after they were married. In her memoirs, the queen wrote: “If I were not who I am, this would be my real home.” The palace, near the town of Coburg in northern Bavaria, is home to Swan Lake and Prince’s Pond.

In its statement, the department said the new swan would have a good life, with a 2-hectare lake and a newly built “swan house” at its disposal. In the chillier months, the birds also have winter quarters with water access and are fed every day. The department said it would go itself to pick up the bird if a member of the public was willing to donate a swan to the grounds. “We hope our swan does not have to be alone for too long,” a spokeswoman for the palace management told German news agency DPA.

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Jul 182017
 
 July 18, 2017  Posted by at 1:03 pm Finance Tagged with: , , , , , , ,  11 Responses »


Hieronymus Bosch Ascent of the Blessed c1510

 

Reading the news on America should scare everyone, and every day, but it doesn’t. We’re immune, largely. Take this morning. The US Republican party can’t get its healthcare plan through the Senate. And they apparently don’t want to be seen working with the Democrats on a plan either. Or is that the other way around? You’d think if these people realize they were elected to represent the interests of their voters, they could get together and hammer out a single payer plan that is cheaper than anything they’ve managed so far. But they’re all in the pockets of so many sponsors and lobbyists they can’t really move anymore, or risk growing a conscience. Or a pair.

What we’re witnessing is the demise of the American political system, in real time. We just don’t know it. Actually, we’re witnessing the downfall of the entire western system. And it turns out the media are an integral part of that system. The reason we’re seeing it happen now is that although the narratives and memes emanating from both politics and the press point to economic recovery and a future full of hope and technological solutions to all our problems, people are not buying the memes anymore. And the people are right.

Tyler Durden ran a Credit Suisse graph overnight that should give everyone a heart attack, or something in that order. It shows that nobody’s buying stocks anymore, other than the companies who issue them. They use ultra-cheap leveraged loans to make it look like they’re doing fine. Instead of using the money/credit to invest in, well, anything, really. You can be a successful US/European company these days just by purchasing your own shares. How long for, you ask?

There Has Been Just One Buyer Of Stocks Since The Financial Crisis

As CS’ strategist Andrew Garthwaite writes, “one of the major features of the US equity market since the low in 2009 is that the US corporate sector has bought 18% of market cap, while institutions have sold 7% of market cap.” What this means is that since the financial crisis, there has been only one buyer of stock: the companies themselves, who have engaged in the greatest debt-funded buyback spree in history.

Why this rush by companies to buyback their own stock, and in the process artificially boost their Earning per Share? There is one very simple reason: as Reuters explained some time ago, “Stock buybacks enrich the bosses even when business sags.” And since bond investor are rushing over themselves to fund these buyback plans with “yielding” paper at a time when central banks have eliminated risk, who is to fault them.

More concerning than the unprecedented coordinated buybacks, however, is not only the relentless selling by institutions, but the persistent unwillingness by “households” to put any new money into the market which suggests that the financial crisis has left an entire generation of investors scarred with “crash” PTSD, and no matter what the market does, they will simply not put any further capital at risk.

In other words, the system doesn’t only keep zombies alive, making it impossible for anyone to see who’s healthy or not, no, the system itself has become a zombie. The article mentions Blackrock’s Larry Fink talking about ‘cash on the sidelines’, but puhlease… Central banks have injected another $2 trillion into the zombie system this year alone, and that gives you that graph. Basically no-one supposedly on the sideline has a penny left.

So that’s your stock markets. Let’s call it bubble no.1. Another effect of ultra low rates has been the surge in housing bubbles across the western world and into China. But not everything looks as rosy as the voices claim who wish to insist there is no bubble in [inject favorite location] because of [inject rich Chinese]. You’d better get lots of those Chinese swimming in monopoly money over to your location, because your own younger people will not be buying. Says none other than the New York Fed.

Student Debt Is a Major Reason Millennials Aren’t Buying Homes

College tuition hikes and the resulting increase in student debt burdens in recent years have caused a significant drop in homeownership among young Americans, according to new research by the Federal Reserve Bank of New York. The study is the first to quantify the impact of the recent and significant rise in college-related borrowing—student debt has doubled since 2009 to more than $1.4 trillion—on the decline in homeownership among Americans ages 28 to 30. The news has negative implications for local economies where debt loads have swelled and workers’ paychecks aren’t big enough to counter the impact. Homebuying typically leads to additional spending—on furniture, and gardening equipment, and repairs—so the drop is likely affecting the economy in other ways.

As much as 35% of the decline in young American homeownership from 2007 to 2015 is due to higher student debt loads, the researchers estimate. The study looked at all 28- to 30-year-olds, regardless of whether they pursued higher education, suggesting that the fall in homeownership among college-goers is likely even greater (close to half of young Americans never attend college). Had tuition stayed at 2001 levels, the New York Fed paper suggests, about 360,000 additional young Americans would’ve owned a home in 2015, bringing the total to roughly 2.9 million 28- to 30-year-old homeowners. The estimate doesn’t include younger or older millennials, who presumably have also been affected by rising tuition and greater student debt levels.

Young Americans -and Brits, Dutch etc.- get out of school with much higher debt levels than previous generations, but land in jobs that pay them much less. Ergo, at current price levels they can’t afford anything other than perhaps a tiny house. Which is fine in and of itself, but who’s going to buy the existent McMansions? Nobody but the Chinese. How many of them would you like to move in? And that’s not all. Another fine report from Lance Roberts, with more excellent graphs, puts the finger where it hurts, and then twists it around in the wound a bit more:

People Buy Payments –Not Houses- & Why Rates Can’t Rise

Over the last 30-years, a big driver of home prices has been the unabated decline of interest rates. When declining interest rates were combined with lax lending standards – home prices soared off the chart. No money down, ultra low interest rates and easy qualification gave individuals the ability to buy much more home for their money. The problem, however, is shown below. There is a LIMIT to how much the monthly payment can consume of a families disposable personal income.

In 1968 the average American family maintained a mortgage payment, as a percent of real disposable personal income (DPI), of about 7%. Back then, in order to buy a home, you were required to have skin in the game with a 20% down payment. Today, assuming that an individual puts down 20% for a house, their mortgage payment would consume more than 23% of real DPI. In reality, since many of the mortgages done over the last decade required little or no money down, that number is actually substantially higher. You get the point. With real disposable incomes stagnant, a rise in interest rates and inflation makes that 23% of the budget much harder to sustain.

In 1968 Americans paid 7% of their disposable income for a house. Today that’s 23%. That’s as scary as that first graph above on the stock markets. It’s hard to say where the eventual peak will be, but it should be clear that it can’t be too far off. And Yellen and Draghi and Carney are talking about raising those rates.

What Lance is warning for, as should be obvious, is that if rates would go up at this particular point in time, even a lot less people could afford a home. If you ask me, that would not be so bad, since they grossly overpay right now, they pay full-throttle bubble prices, but the effect could be monstrous. Because not only would a lot of people be left with a lot of mortgage debt, and we’d go through the whole jingle mail circus again, yada yada, but the economy’s main source of ‘money’ would come under great pressure.

Don’t let’s forget that by far most of our ‘money’ is created when private banks issue loans to their customers with nothing but thin air and keyboard strokes. Mortgages are the largest of these loans. Sink the housing industry and what do you think will happen to the money supply? And since inflation is money velocity x money supply, what would become of central banks’ inflation targets? May I make a bold suggestion? Get someone a lot smarter than Janet Yellen into the Fed, on the double. Or, alternatively, audit and close the whole house of shame.

We’ve had bubbles 1, 2 and 3. Stocks, student debt and housing. Which, it turns out, interact, and a lot. An interaction that leads seamlessly to bubble 4: subprime car loans. Mind you, don’t stare too much at the size of the bubbles, of course stocks and housing are much bigger issues, but focus instead on how they work together. As for the subprime car loans, and the subprime used car loans, it’s the similarity to the subprime housing that stands out. Like we learned nothing. Like the US has no regulators at all.

Fears Mount Over a New US Subprime Boom – Cars

It’s classic subprime: hasty loans, rapid defaults, and, at times, outright fraud. Only this isn’t the U.S. housing market circa 2007. It’s the U.S. auto industry circa 2017. A decade after the mortgage debacle, the financial industry has embraced another type of subprime debt: auto loans. And, like last time, the risks are spreading as they’re bundled into securities for investors worldwide. Subprime car loans have been around for ages, and no one is suggesting they’ll unleash the next crisis.

But since the Great Recession, business has exploded. In 2009, $2.5 billion of new subprime auto bonds were sold. In 2016, $26 billion were, topping average pre-crisis levels, according to Wells Fargo. Few things capture this phenomenon like the partnership between Fiat Chrysler and Banco Santander. [..] Santander recently vetted incomes on fewer than one out of every 10 loans packaged into $1 billion of bonds, according to Moody’s.

If it’s alright with you, we’ll deal with the other main bubble, no.5 if you will, another time. Yeah, that would be bonds. Sovereign, corporate, junk, you name it. The 4 bubbles we’ve seen so far are more than enough to create a huge crisis in America. Don’t want to scare you too much all at once. Just you read the news again tomorrow. There’ll be more. And the US Senate is not going to do a thing about it. They’re too busy not getting enough votes for other things.